Journal of Commerce Poll on Economic Recovery
A majority of the attendees at the ninth annual Journal of Commerce Trans-Pacific Maritime conference do not expect a recovery from the global economic downturn and a return in growth of trans-Pacific trade before 2011, according to live poll questions asked during the conference.
The response to audience questions at the recent conference in Los Angeles highlighted strong pessimism about prospects for recovery in coming months. Moreover, attendees said that because of tighter credit and the long-term impact on consumer spending they do not expect trans-Pacific containerized trade to return to growth rates between 2002 and 2006, when retail sales led to enormous growth in U.S. imports.
Only 4 percent of attendees expect the U.S. recession to end this year, in contrast to some economists who are forecasting a return to growth by the third quarter. More than 40 percent of attendees don't see growth returning to trans-Pacific volumes until 2011 and another 18 percent said it would be 2012 before the economy recovers.
Responding to a separate question, fully 60 percent say they will handle fewer containers this year than last year while only 8 percent see growth resuming this year.
"The trans-Pacific eastbound container market is a direct reflection of consumer spending and housing, and those have all been among the hardest hit segments of the economy," said Paul Page, editorial director of the Journal of Commerce. "Consider that for all of 2008, real U.S. GDP grew 1.1 percent while trans-Pacific import volumes fell 7.6 percent, more than seven times the rate of decline of the economy overall."
More broadly, the comments reflect the dire outlook for global trade. The World Trade Organization forecasts global trade to fall 9 percent in 2009 while the International Monetary Fund forecasts global GDP to fall 0.5 percent this year. In periods of growth, trade expands faster than economic growth while in contractions it falls faster, reflecting the globalized nature of supply chains.
The poll questions were asked over two days at the 2009 TPM, held March 2-3 in Los Angeles. Attendees were asked to respond to a series of live poll questions posed by moderators during the conference sessions.
Here are results to some of the questions asked of the audience at The Journal of Commerce Ninth annual Trans-Pacific Maritime Conference March 2-3, 2009:
1) When do you believe the U.S. recession will officially end? (575 responses)
This year 4.17%
What recession? Business is fine 1.57%
2) When will container import volumes from Asia resume growing? (636 responses)
1st half of 2009 0.16%
2nd half of 2009 8.18%
Beyond 2010 39.62%
Who knows? 5.35%
3) When do you think China's economy will return to double-digit growth? (402 responses)
Beyond 2011 39.05%
China's official growth forecast is 8 percent for this year while some others believe the growth will be lower, perhaps 6 percent. The majority of the TPM attendees, in a response consistent with other questions, do not see an immediate return to double-digit economic growth in China.
4) Do you think the Trans-Pacific eastbound trade will return to the growth rates of 2002-06? (396 responses)
5) What is the biggest threat to global trade over the next 5 years? (429 responses)
Unstable banking system 44.76%
Rising oil prices 10.49%
Political instability 10.49%
Disruption due to carrier failures 8.16%
The industry sees the problems they face in trade as being tied to larger economic issues and believes that a return to global economic growth and stability will play more of a role than trade barrier issues in getting container volumes moving again.
6) The number of containers that you ship or handle this year will be: (493 responses)
Less than last year 60.24%
About the same as last year 20.69%
More than last year 19.07%
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