There air freight demand in July 2023 was only 0.8% lower than the levels of the same month of the previous year, according to the monthly report of theInternational Air Transport Association (IATA).
Although the demand is now practically stable compared to 2022, this is a improvement compared to the performance of recent monthsparticularly significant given falling global trade volumes and growing concerns about the Chinese economy, IATA noted.
In July 2023, global demand, measured in freight tonne kilometers (CTK), stood 0.8% below July 2022 levels (-0.4% for international operations). This is a significant improvement compared to the previous month’s performance (-3.4%). Capacity, measured in available freight tonne kilometers (ACTK), is up 11.2% compared to July 2022 (8% for international operations).
According to IATA, several factors related to the operating environment must be considered:
-In July, the purchasing managers’ index of manufacturing production PMI (49.0) and that of new export orders (46.4) were below the critical threshold represented by the 50 mark, indicating a decline in manufacturing production and global exports.
-Global cross-border trade contracted for the third consecutive month in June, down 2.5% year-on-year, reflecting slowing demand and challenging macroeconomic conditions. The difference between the annual growth rates of air freight and global merchandise trade narrowed to -0.8 percentage points in June. Although air cargo growth continues to lag global trade, the gap is the narrowest since January 2022.
-In July, the global PMI supplier delivery time index was 51.9, indicating a decrease in supply chain delays. All major economies except China had PMIs above 50. The United States, Europe and Japan recorded PMIs of 54.2, 57.7 and 50.4, respectively. Inflation saw a mixed picture in July, with U.S. consumer price inflation accelerating for the first time in 13 months. Meanwhile, in China, consumer and producer prices have fallen, pointing to a possible deflationary economy.
How will air freight evolve in the coming months? “Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there are growing concerns about how China’s economy is growing. At the same time, we are seeing shorter delivery times, which is normally a sign of increasing economic activity. Amid these mixed signals, strengthening demand gives us good reason to be cautiously optimistic“, said Willie Walsh, Director General of IATA.
