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Autumnal outlook for Stifel Index
[ September 22, 2015 // Chris ]The Stifel Logistics Confidence Index suffered its fourth consecutive month of decline in September. It reached its lowest point in 26 months, and also recorded its fastest pace of decline While the Index, at 51.5, remains above the neutral 50 mark, times may be gloomier that the numbers alone suggest, Ti add.
It says that September’s most concerning figure is the Logistics Situation Index – at 49.4, the index indicated an erosion in confidence, likely based on a combination of China’s slowing economy, general weakness in emerging markets and tepid global trade.
The six-month outlook shows a fall of 3.3 points and expectations for the sea freight market are even bleaker. The loss of 3.5 index points in a month put the Logistics Expectations Index for sea freight at 52.9, 12.2 points below the confidence levels of September 2014. Just a single lane saw growing confidence in September, the US to Europe lane which rose 0.4 points to 48.2. The Europe to Asia and Asia to Europe lanes both saw a 2.3 point decline to 48.7 and 54.1 respectively. The Europe to US lane fell 0.9 points to 47.6.
Air freight volumes fell in July, down marginally by 0.6% when measured by FTK, according to IATA. Weak global growth, a turbulent few weeks in the Chinese economy and general weakness in emerging economies were blamed for the fall. The results of this put all but one trade lane below the neutral 50 mark for September. Europe to Asia was hurt the most as it fell 3.7 points to 44.7, while the reverse lane lost 3.1 points as it fell to 47.5.
The US to Europe lane also finished below the 50 mark, at 49.6, although this represented a 1.3 point gain over August. Europe to US remained seemingly healthy, at 54.4 for September, although this was 3.4 points lower than the 57.8 mark seen in August. Overall, at 48.9, the Logistics Situation Index for airfreight was 2.4 points down on the previous month, and 4.1 points down compared with September 2014.
The Logistics Expectation Index for air freight saw even more rapid declines, shedding 3.1 points compared with August to finish at 54.2 as all lanes saw falling confidence. Losing the most was the Asia to Europe lane which declined 4.4 points to 53.8, while the Europe to Asia lane saw a 4.0 point dip to 51.8. A 2.3 point decline meant the US to Europe lane ended September at 52.8, while a loss of 1.8 points had the Europe to US lane ending the month at 58.3.
