Recent Study: Hong Kong Freight Transport Report Q2 2010

PRLog (Press Release) - Mar 12, 2010 -
According to International Freighting Weekly, Hong Kong International Airport (HKIA) registered a 5.9% quarter-on-quarter (q-o-q) increase in cargo volumes in Q209. However, HKIA recorded a decline in cargo volumes of 13.4% year-on-year (y-o-y) to 270,000 tonnes in June 2009, with a 17% y-o-y slump in exports. In the same period, it reported a 13.3% y-o-y plunge in air traffic movements. The decline was mostly due to a slowdown in demand from North American and European markets. The global airfreight sector had recorded a decline in growth since June 2008, according to data from the International Air Transport Association (IATA). In the five months to July, declines globally had been more than 20%. IATA had revised down its airline financial losses forecast for the year from US$4.7bn, the estimate in March 2009, to US$9bn industry-wide for 2009. According to BMI's latest estimates and forecasts, Hong Kong's recession is over and the drop in GDP in 2009 will be less severe than we first expected. We are now projecting a 3.0% contraction for 2009, less than the 5.7% we had earlier suggested. The outlook for 2010 remains unchanged with growth of 2.4%, but we have edged up our 2011 number to 5.1% (from 4.8% previously). Across the next five years (2010-2014), we project the local economy to grow at an annual average of 4.6%, higher than the 3.9% registered in 2005-2009. With the proviso that these projections are heavily dependent on the continuing strength of the mainland economy, Hong Kong's transport businesses, which are mainly organised around shipping and airfreight, therefore face a period of emergence from the 2009 recession and favourable growth thereafter. Maritime freight volumes will continue to be affected by the global downturn and by competition from other regional ports such as Shenzhen, Singapore and Shanghai. In terms of total freight handled across all sub-sectors, measured in million tonnes, we forecast Hong Kong to experience an average annual growth of 2.6% in the 2010-2014 period. This compares with 2.0% in 2005-2009. According to our estimates, transport and communication GDP will have fallen by 3.0% in 2009, on a par with overall GDP. For the 2010-2014 forecast period, we expect the transport and communications sector to outpace the economy as a whole in value terms, although by a small margin. It will achieve average annual growth of 4.8%, versus 4.6% for overall GDP. The total value of transport and communications GDP will rise to US$31.bn in nominal terms by 2014, or 11.0% of Hong Kong's GDP. The transport and communications sector employed 379,400 people, or 11.3% of the labour force, in 2008. This will rise to 389,000 by 2014, while not changing as a proportion of the total labour force. The economic boom in mainland China, notwithstanding what the recent short 'pause', will continue to create a complex mix of opportunities and threats for Hong Kong. In general, as the special administrative region (SAR) repositions, we believe it will be the higher-value/lower-bulk transport modes that are most resilient. We are therefore relatively confident about longer-term prospects for airfreight, particularly for regional trade in electronics, IT products and express/parcel delivery. BMI's forecast is that airfreight volume (in million tonnes/km) will grow by an annual average of 6.5%, faster than in the preceding five years. We continue to trim seaborne freight forecasts to take account of the growing competitive threat from rival ports, particularly those in mainland China with lower labour costs, such as Shanghai and Shenzhen. We expect throughput to grow by an annual average of 2.6%, an improvement on the 2009 recession-dominated 2.0% figure for the preceding five years. Rail freight, always relatively marginal in Hong Kong although beginning to pick up in importance, will grow at 3.7%, an increase on the rate over the preceding five years.

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