Here's another bullish indicator on the state of the global economy

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There’s no shortage of indicators that suggest the global economy is in rude health as we enter 2018.

Here are another two, courtesy of the global airline industry.

According to the International Air Transportation Association, or IATA, the amount of cargo and passengers whizzing through the skies continued to grow strongly in November, a hard economic indicator that suggests the global economic recovery is continuing to build momentum.

In terms of freight, IATA said global freight tonne kilometres, or FTKs, rose by 8.8% year-on-year in November, leaving it on track to record the fastest full year of growth since 2010, the period coinciding with the recovery from the global financial crisis.

FTKs are calculated by multiplying weight of cargo by distance travelled. The increase in FTKs was more than double the growth in freight capacity over the same period.

The chart below from IATA shows the scale of the improvement recorded over the past year.

Source: IATA

Like freight, the number of passengers hitting the skies also grew strongly with revenue passenger kilometres, or RPKs, lifting by 8% from a year earlier.

“With just one month’s worth of data to come, 2017 remains on track to be another year of above-trend passenger growth, some way ahead of the ten-year average pace of 5.5%, ” IATA said.

“The upward RPK trend has strengthened towards the end of 2017, pointing to good start for passenger growth in 2018.”

RPKs are calculated by multiplying the number of paying passengers by distance travelled.

Like freight volumes, RPKs have also improved noticeably in the second half of the year in seasonally adjusted terms.

Source: IATA

IATA said passenger capacity increased by 6.3% over the year, below the growth in actual passengers.

Given the strength in leading economic indicators such as Purchasing Managers Indices (PMIs), IATA is forecasting annual RPK growth of 7.5-8% into the start of 2018. For freight, it expects FTKs to come in close to the five-year average of 4.5% in 2018 as a whole.

“This would be a robust outcome following-on from the very strong performance in 2017,” it says.

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