The rhetoric around logistics markets is one of widespread gloom. The most recent episode of distress is the apparent struggles of container shipping lines in their attempts to introduce ‘General Rate Increases’. This is paralleled by the “suspended animation” of the air cargo market described by IATA. Road freight is, as ever, a more mixed picture with some movement in the US economy, although this is hardly cause for great excitement and Europe remains mixed at best.
However, one of the key forward indicators for logistics generally, and air freight in particular, has indicated an interesting, but perhaps not definitive, signal of growth. The American semi-conductor industry association reported that May “was an unambiguously strong month for the global semiconductor industry”. Although the detailed numbers show just a 1.3% increase in year-on-year sales, the increase from April to May was 4.6%, with growth seen in all the major economies of the world.
Unambiguous is perhaps an exaggeration, however the survey does complement figures from IHS iSupply which show inventories falling “significantly in the first quarter as the excess stockpiles created by the global economic malaise of 2012 were cleared away in anticipation of a resurgence in consumer demand for electronic products expected by the second half of 2012”. Further down the consumer electronics supply chain, inventories grew amongst ‘smartphone’ manufacturers by 7.2% and PC manufacturers by 6%. iSupply said this was an indication that the electronics sector is preparing for an increase in sales in the second half of this year; with sales are expected to be particularly strong in emerging markets.
With consumer electronics being in the vanguard of private sector economic activity, these forecasts are a strong suggestion that many consumer markets are recovering. Naturally, this is still complicated. The situation in many previously strong emerging economies is changing rapidly, however consumer demand has suffered less than activities such as industrial investment. Overall, it is a sign that prospects in specific areas such as air freight, but also logistics generally, are improving. Even if such growth does appear however, the structural problems of over-capacity and misallocated capital will, of course, remain.
Further data and analysis of global semiconductor sales as well as other trade and macro-economic data can be found via Ti’s Dashboard facility. Click here for more information.