Archive for April, 2013

JOC Insights by Mario Moreno: U.S. Apparel Imports Down in 1.7% in 2012

April 30, 2013

APPAREL IMPORTS DOWN IN 7 OF LAST 9 MONTHS

U.S. imports of apparel (HS code 61) slid 0.9% year-over-year in January after jumping 8.8% in December. Imports are down in 7 of the last 9 months. For all of 2012, apparel imports totaled $41.1 billion, down 1.7% over the prior year, partly owed to weak disposable income growth and soft demand from downstream retailers.

US Apparel Imports

REAL DISPOSABLE PERSONAL INCOME GROWTH PER CAPITA FLAT IN LAST 5 YEARS

A major driver of apparel imports is disposable personal income because ordinary clothes aren’t luxury goods.

U.S. real disposable personal income (RDPI) per capita grew a tiny 0.8% in 2012 over the prior year, and is up 0.2% in February 2013 over February 2012. The graph shows that since January 2000 RDPI per capita expanded steadily through end of 2006 but since then growth has flattened. This is downbeat for the outlook of apparel imports as they are linked to disposable income growth. RDPI per capita was up 14.8% in December 2006 over January 2000, and up a similar 14.5% in February 2013 over January 2000.

US Real Disposable Income per capita

CHINA REGAINING SHARE OF U.S. APPAREL IMPORTS IN 2012

In previous reports I’ve analyzed how China is losing share of U.S. imports of major labor-intensive goods including footwear, toys and furniture. But, in the case of apparel, the facts show otherwise.

China is the largest supplier of apparel to the U.S. and to the rest of the world by dollar value. China sourced 36.4% of all U.S. apparel imports in 2012, up by 0.3 percentage point from 2011, but still down by 0.3 percentage point from 2010. Although imports from China declined modestly last year, a small rebound was seen in its share of imports helped by marked decreased shipments from other emerging economies. Other source countries that gained significant share last year were Vietnam, up by 1 full percentage point to a total import share of 10.1%, and El Salvador, up by 0.3 percentage point to a total import share of 3.9%.

US Apparel Imports and Annual Growth Rates

In terms of annual growth, the data shows that imports from China dropped 1% last years after rising by 8% in 2011. Rising wages and costs challenge the obvious benefits of a well-developed manufacturing infrastructure, prompting relocation of production activities to Southeast Asia and Central America. Imports from Vietnam jumped 10% last year following an increase of 13% in 2011, while imports from El Salvador rose 6% last year following an increase of 6%. Strangely, imports from Mexico declined 7% last year after growing by 6% in 2011 despite near-sourcing advantages. Mexico’s share of imports declined from 3.4% in 2011 to 3.2% in 2012.

More of Moreno’s trade and economic analysis can be obtained by subscribing to JOC Insights or by following him on Twitter @MarioMoreno_JoC.

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U.S. Toy Imports Wind Down in Fourth Quarter 2012

April 23, 2013

Containers of toys imported through U.S. ports showed a slight decline in the fourth quarter of 2012, the first year-over-year decline since the first quarter of 2012. Imports edged down 1.5 percent to 160,203 20-foot-equivalent units from 162,710 TEUs in the fourth quarter of 2011.

Toys_4-3-13_BIG

Imports showed mixed shifts throughout 2012. Toy imports inched up 0.6 percent in the third quarter, 1.7 percent in the second quarter, and imports fell almost 5 percent in the first quarter, according to data from PIERS, a JOC sister company. The fourth quarters of 2012 and 2011 both showed year-over-year declines. The drop in 2011 was by 11.3 percent over the fourth quarter of 2010.

The toy import volume for full-year 2012 was 524,644 TEUs, down 1 percent or 4,768 TEUs from 529,412 TEUs in 2011.

Mainland China, not including Hong Kong, continued to dominate the market with an 81.7 percent share of imports, although its share was down 1.2 percentage points year-over-year. Other top countries of origin for U.S. toy imports in 2012 were Hong Kong, with 6.6 percent, down 0.3 percentage points; Vietnam, 1.5 percent, up 0.1 percentage points; and Taiwan, 1.4 percent, up 0.1 percentage points.

Toy imports from Germany and Israel saw a jump in 2012. Imports from Germany rose 43 percent from 3,690 TEUs in 2011 to 5,291 TEUs in 2012. Imports from Israel in 2012 totaled 3,390 TEUs, 35 percent more than the 2,507 TEUs imported in 2011.

Economists Cautiously Optimistic Over U.S. Import & Export Growth Forecast

April 16, 2013

Are we seeing enough economic recovery this spring to support growth in volumes of U.S. containerized imports and exports? Economists are seeing some hope, especially in the U.S., but the spring is still looking pretty chilly on a global scale. In the U.S., housing starts and employment are up, but much of southern Europe is mired in recession and growth in emerging Asian markets is slowing.

On the whole, a global recovery is under way, but there are plenty of risks that could cause growth to sputter, especially if it encounters another “black swan” event in the form of an unpredictable catastrophe such as the tsunami and nuclear disaster that struck Japan in 2011.

Any recovery in Europe could be upset by eruption of a fiscal crisis in southern Europe. “Optimism has started to take hold in recent months, but the economic hangover is still very much with us,” said Nick Kounis, head of macroeconomic research for ABN Amro Bank. Yet trade volumes are likely to get stronger this year and even stronger by the second half of 2014 when the global recovery takes hold. Global trade volume, which increased 3% in 2012, is likely to grow 3.3% this year and 3.9% in 2014, Kounis said.

US Containerized Exports

Source: PIERS/JOC Container Shipping Outlook, March 2013

But persistent global economic clouds are causing some economists to cut their forecast of U.S. trade growth. In March PIERS/The Journal of Commerce, economist Mario Moreno reduced his forecast for the growth of U.S. containerized exports this year to 2%, to a total of 12.1 million TEUs, compared with his previous forecast of 4.1%, “in light of the fourth quarter’s weak performance, the general deceleration of volume growth during 2012, and less optimistic economic forecasts across the globe.”

Moreno also cut his forecast for 2014 export growth to 3.4% from the 4.4% rate he estimated in December. “While fiscal uncertainty in the U.S. has been largely contained, in Europe, questions remain on how solid the commitment to austerity is, especially in Italy, where anti-austerity candidates made progress in the last election,” he said. “Such an outcome makes already nervous investors less willing to commit capital to projects and could delay the economic recovery across the European continent.”

Us Containerized Imports

Source: PIERS/JOC Container Shipping Outlook, March 2013

Moreno expects import volumes to grow 2.6% in 2013 to a total of 17.6 million TEUs, compared with just 1.5% in 2012. But he remains cautious in view of the 3.9% dip in total U.S. import volumes in the final quarter of 2012, which capped a disappointing 2012 for U.S. inbound container trade. Annual containerized import traffic expanded just 1.5% during the year, decelerating from the 2.7% pace set in 2011 and a far cry from the 14.5% increase posted in 2010.

He said the 2012 performance was significantly below the two-year moving average of 10.4%, which indicates further sluggishness going forward. Although the fourth quarter 2012 performance can be partially attributed to Hurricane Sandy and labor disputes at U.S. ports, he said the slowdown was primarily due to worsening U.S. economic conditions, particularly fiscal uncertainty and its impact on private investment, which was keeping a tight lid on containerized import growth. “I do not see these conditions appreciably improving during 2013 and am therefore compelled to lower our projection to 2.6% growth,” Moreno said.

For more information about PIERS trade intelligence visit www.piers.com or to learn more about The Journal of Commerce’s Container Shipping Outlook visit www.joc.com.

Quotes in Motion

April 11, 2013

 

Fitz_Hugh_Lane_Three-Master_on_a_Rough_Sea_1851_1859

“We must free ourselves of the hope that the sea will ever rest. We must learn to sail in high winds.”  ~ Aristotle Onassis

WCI: Trans-Atlantic Rate Increase Flops

April 9, 2013

Trans-Atlantic carriers failed to achieve a general rate increase set for April 1 between Northern Europe and the U.S. East Coast. Several major carriers announced rate hikes of between $200 and $300 on eastbound lanes and $300 and $500 westbound. While eastbound rates did increase $148, a portion of the proposed GRI, westbound rates actually fell $40, showing that the market could not sustain such an increase.

Rates from Rotterdam to New York fell 1.6% this week to $2,411 per 40-foot container, according to the latest release of the World Container Index. They had been stuck at $2,451 for the past four weeks. The rate is 1.3% lower than it was at the beginning of the year and 5.5% lower than it was at this point in 2012.

WCI-Trans-Atlantic-20130404

Trans-Atlantic eastbound rates had a 9.4% jump in the week of April 4, which was their first increase since mid-January 2013 and their largest increase since the beginning of 2012. The rate from New York to Rotterdam rose $148 to $1,716 per 40-foot container. Despite the increase, the index still remains 11.5% lower than it was at the beginning of 2013. It is now 17% lower than it was at this point last year.

Spring Flowering Bulbs

April 4, 2013

Bulbs are self-contained little packages of power that will reward the grower with years of floral satisfaction!

2012_US_Waterborne_Flower_Bulb_Import

The United States has long been the biggest customer of flower bulbs from the Netherlands, over half of the exported flower bulbs are tulips; followed by gladioli, daffodils and hyacinths – accounting for almost 4,500 TEUs of flower bulb imports into the U.S. The Netherlands remains the center of production for the European floral market, as well as a major international supplier to other continents. The official start of tulip season in Amsterdam is January, running until the end of April. The Netherlands has the largest production area with 10,800 hectares, accounting for the many thousands of tulip variants in every color, which find their way into vases around the world.

PIERS offers instant access to details on U.S. import shipments. Our international trade data combined with market specific intelligence can help provide a global picture of a commodity and the companies trading. Register online for a demo.

U.S. Banana Imports Rise Sharply

April 2, 2013

PIERS shows containerized banana imports into the U.S. rose sharply in the fourth quarter of 2012, continuing a trend of year-over-year growth seen throughout the year.

US-Banana-Imports

Imports in the fourth quarter grew to 103,121 TEUs from 85,245 TEUs in the fourth quarter of 2011. This was the seventh straight quarter of increases for banana imports.

The fourth quarter’s 21% rise was the largest year-to-year increase in the past few years. Banana imports had grown 14% in the third quarter, more than 13% in the second quarter and more than 5%t in the first quarter, according to data from PIERS.

The total number of TEUs of bananas imported into the U.S. in the full year of 2012 was 413,640, up 13.4% or 48,873 TEUs from 364,767 TEUs in 2011.

The top countries of origin for U.S. banana imports in 2012 were Guatemala, with a 30.2% share of imports, with its share down 2.1% from 2011; Costa Rica, with 21.2%, up 0.2%s; Ecuador, 19.%t, down 0.5%; and Honduras, 17.4%, up 0.7%. Imports from Panama more than doubled in 2012 from 3,531 TEUs in 2011 to 7,322 in 2012. Also, imports from Mexico via ocean container nearly doubled in 2012 with 16,089 TEUs imported, 85% more than the 8,712 imported in 2011.

Additional trade data stories provided exclusively by The Journal of Commerce can be found on joc.com.


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