Long Beach Forecast Modest Growth
A slowing domestic economy will likely lead to a moderate uptick in container imports through 2019, following a robust year that was marked by record-high cargo growth amid a trade dispute with China, said Port of Long Beach.
North American imports are projected to grow a modest 1.8 percent in 2019, demonstrating a significant slowdown from the 6.1 percent increase reported for U.S. imports last year, said Melissa Peralta, senior economist and forecaster for TTX, a railcar pooling company based in Chicago.
Retailers are expected to pump the brakes on imports during the first half of 2019, primarily because many companies rushed shipments in order to avoid a tariff hike that was supposed to be implemented in late 2018 and then early 2019, but never materialized, Peralta said.
Imports will be further impacted during the second half of the year in response to a sluggish U.S. economy as the initial effects of the federal Tax Cuts and Jobs Act of 2017 start to fade, Peralta said. She also estimated the overall U.S. economy will expand 2.7 percent this year.
“Economic fundamentals should continue to be supportive into 2019, albeit at a moderating pace,” Peralta said. “But imports may struggle to keep pace with overall economic growth due to an overhang of freight delivered in late 2018.”
Peralta also noted that Long Beach and other West Coast ports might benefit from the International Maritime Organization’s requirement that container ships reduce the sulfur content of vessel fuel from 3.5 percent to 0.5 percent starting on Jan. 1, 2020.