Posted on 01 August 2013 with no comments from readers
When the world’s third largest container handling company DP World reports global like-for-like volumes down by 2.1 per cent in the first half of the year then we have solid data indicating recessionary conditions in the global economy, eons away from the much hyped recovery on Wall Street.
Share prices have gone up, but global trade is contracting. Even the strong UAE economy could only muster ‘relatively flat’ container volumes of 6.5 million. As a bloc Europe, Middle East and Africa was down 5.7 per cent on the first half of 2012.
But it is the global headline figure for trade that stands out. Yes trade was up by 2.7 per cent in the Americas and Australasia. But that’s about it with Chinese and Indian trade also slowing down. The outlook is mixed.
‘Despite a softer first half when compared with the same period last year, we saw an encouraging uplift in containers handled during the second quarter,’ said CEO Mohammed Sharaf. ‘This uplift, while positive, has occurred in challenging market conditions which we anticipate will continue into the second half.
‘We maintain expectations of like for like container throughput in line with 2012 with our portfolio positioned toward the faster-growing emerging markets and stable origin and destination cargo.’
DP World is continuing to invest and will bring online new operations in the London Gateway and Santos in Brazil within the second half of the year. However, if business continues to be so weak the group will clearly have to slow down its planned expansion from handling 56 million to 100 million containers by 2020.
Bullish commentators think that the US economic recovery will build – despite the headwinds of rising interest rates and a recession in Europe and parts of Asia – and more than offset downturns everywhere else.
Perhaps a more sober view is that the global economy is in deep trouble and struggling to stay afloat. Its been a very weak recovery by historical standards and even that now seems to be over. The trade depression is contained by money printing, not a stable scenario if history is any guide.
Still it is nice to see Dubai as a beacon of transparency in publishing such economic data as the DP World trade statistics which show the world as it really is rather than how Wall Street would have us see it.