Paul,
Just got off the phone with one of my old collegue from my steamship/containership days, and was advised that the quality of imports are starting to decrease. It was also advised that some major importers, which I prefer not to mention, are advising of projected drops in imports. This is a hint that consumption of foreign goods will drop, which wont help ASIA.
As previously mentioned some of my other collegues in ASIA are already seeing layoffs/rise in unemployment, which appears be have confirmation per the info I just got.
Originally, the steamship line in question had projected 12% for this year, but just last week reported that they will be lucky if it breaks even.
As for our containerized exports, it is still the lowest paying cargoes like wastepaper/paper products/metal scrap/hides/cheap chemicals. The main complaint from the exporters is the high U.S.Dollar.
The TRADE deficit is still at records highs and even if the imports drop off, there wont be much improvement since our exports are basicly only the cheapest of cargoes.
If the U.S. import consumption continues to drop, which is expected by the importers which were mentioned to me, that would put additional strain on a already weakened ASIA. If ASIA continues to weaken, how well will a weakened U.S. hold up.
To put it in perspective, my understanding is that the U.S. economy is about 15-20% dependant on trade, while many ASIAN countries are more than 50% dependant on trade, some as high as 80%. A continuous drop in U.S. import consumption will definitly hurt ASIA, since we are their largest customer by far.
As for the U.S. economy bouncing back significantly by the end of the year, as many analysts are projecting, I will be in the group that says "SHOW ME FIRST". I did not say it will not happen, just that I want to see proof first. |
