This trade indicator suggests global demand isn't getting any worse, at least at this point

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  • Like the vast majority of global trade indicators, global air freight volumes have been weakening of late.
  • In March, the pace of decline in global air freight volumes slowed sharply. New export orders, as measured in the global manufacturing PMI for April, are also falling at a slower pace than in previous months.
  • While there are still ample risks out there, none least a further escalation in US-Sino trade tensions, global demand doesn’t look like it’s getting any weaker at this point.

As a gauge on what’s happening in global trade, there’s few better indicators out there that the amount of freight whizzing above our heads.

Like most other trade indicators recently, global air freight volumes have been weak, falling at the fastest annual pace in several years in the early parts of the year.

However, the pace of decline slowed noticeably during March, offering tentative evidence to suggest global demand may be starting to turn the corner, or at least not getting any worse.

According to data released by the International Air Transport Association (IATA), global freight tonne kilometres (FTKs) — simply measuring the weight of air freight transported multiplied by the distance travelled — declined by 1.5% in the year to March after adjusting for seasonal patterns, a slower decline than those reported in the first two months of the year.

FTKs in March also lifted modestly compared to the levels seen in February after adjusting for seasonality.


The moderation coincides with a less-severe decline in export orders in the latest global manufacturing PMI released by IHS Markit for April.

The slower decline in FTKs in March reflected a most increase in annual volumes growth in all major regions except for Asia-Pacific. While FTKs in Asia continued to fall in year-on-year terms, the pace of decline also slowed noticeably from the levels reported in February.

IATA described the latest results as a “positive development”, although it cautioned that “conditions facing the industry remain challenging”.

“It would be premature to suggest that the uptick represents a change in the trend growth rate without first seeing signs of confirmation in coming months,” it said.

Sage advice, especially given well-documented problems in measuring trade volumes in the early parts of the year due to the shifting Lunar New Year calendar, creating distortions as many large Asian nations, including China, break for holidays.

Renewed trade tensions between the United States and China, carrying the potential to disrupt trade flows further should both sides take retaliatory actions against the other later this week, is another reason for caution.

However, despite the risks and need for caution, the evidence is building to suggest trade flows aren’t getting any worse at this point.

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