Abstract
Throughput at Hong Kong Air Cargo Terminals (HACTL) fell by 30.9% year-on-year
(y-o-y) in January
2009, with the company' s imports slumping by 34.7% and
its exports by 32.6%. Imports from Europe
were down 41.7% y-o-y in the
month, while exports to Europe declined by 28.2% y-o-y. Industry
observers
believe that the economic downturn in Western markets has resulted in waning
demand for
Asian goods globally, and that it is the main reason behind
HACTL' s cargo decline. Moreover, the
International Air Transport
Association (IATA) notes that the airfreight industry is in its worst
decline
since the technology bubble burst in 2001. One of the worst
affected regions is Asia Pacific.
In BMI' s view, the global economic
slowdown is having a more negative impact on Hong Kong than was
originally
expected. Hong Kong' s transport businesses - which are mainly organised around
shipping and
airfreight - face short term contraction and medium term low
growth. Maritime freight volumes will
continue to be affected by
competition from other regional ports such as Shenzhen, Singapore and
Shanghai. In terms of total freight (across all subsectors) measured in
million tonnes, our forecast is for
Hong Kong to experience average annual
growth of 1.3% in the 2009-2013 period. This is a significant
decline from
the 2004-2008 period, when the average growth was 3.3%.
According to our
latest estimates, transport and communications (T&C) GDP rose by 3.4% in 2008
- 0.9
pps faster than overall GDP, which we estimate to have increased by
2.5%. For the 2009-2013 forecast
period, we expect the T&C sector to
outpace the economy as a whole in value terms (although by a
smaller
margin than in 2008). It will achieve average annual growth of 2.7%, versus
2.5% again for the
overall GDP. The total value of T&C GDP will rise to
US$29.8bn in nominal terms by 2013, representing
11% of Hong Kong' s GDP.
The T&C sector employed 374,100 people, or 11.3% of the labour force, in
2008. We see that figure rising to 386,600 by 2013, whilst not changing as a
proportion of the total labour
force.
The powerful economic boom in
mainland China - notwithstanding what will be a one to two year
' pause' -
will continue to create a complex mix of opportunities and threats for Hong
Kong. In a slower
growth scenario, the balance will tip a little more
towards the threats. In general, as the Special
Administrative Region
(SAR) repositions itself, we believe it will be the
higher-value/lower-bulk
transport freight modes that are most resilient.
So, despite the current downturn, we remain relatively
confident about
longer-term prospects for airfreight, particularly in terms of regional trade
in electronics,
IT products, and express/parcel delivery. BMI forecasts
that airfreight volume (measured in million
tonnes/km) will grow by an
annual average of 2.8%, slower than the growth rate of the preceding five
years.
We continue to trim sea-borne freight forecasts to take account of
the growing competitive threat from
rival ports, particularly those in
mainland China with lower labour costs, such as Shanghai and Shenzhen.
We
expect throughput to grow by an annual average of 1.4%, a decline from the
3.9% figure over the
preceding five years. Rail freight, always relatively
marginal in Hong Kong, will grow at 2% - an
increase on the average rate
over the preceding five years.
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