Global air freight is taking off providing yet another sign that global economic conditions are improving.
According to data released by the International Air Transport Association (IATA) overnight, global freight tonne kilometres (FTK) grew by 12.7% year-on-year in May, accelerating upon the 8.7% increase reported in April.
A fairly significant increase, more than three-times faster than the 3.8% year-on-year average seen over the past five years, according to IATA.
FTKs are calculated by multiplying total tonnage carried by distance travelled.
Over the first five months of the year, FTKs grew by 10.2% compared to the same period in 2016, marking the strongest rebound seen since 2010 following the depths of the global financial crisis.
Excluding the impact of the leap year in 2016, IATA said the year-on-year increase was closer to 11%.
And, as seen in the chart below from IATA, the global growth in FTK’s was driven by all regions, an outcome that again suggests a synchronised acceleration in the global economy.
“The robust recent performance of air freight has been set against a stronger global economic and trade backdrop,” said IATA, noting that the improvement coincides with the new orders index in the JP Morgan-IHS Markit global PMI survey hitting the highest level in six years just a few months ago.
That suggests the recent improvement in “soft” economic data, such as PMI surveys, are now being replicated on the ground.
It’s getting harder to say that global economic conditions aren’t improving, and helps explain why many major central bank’s are now considering winding back emergency monetary policy settings that were initiated when conditions weren’t nearly as strong as they are now.