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September 2017 IATA Air Freight Market Analysis
September data suggest FTKs have passed the cyclical growth peak

 
Another robust month of annual FTK growth…
Industry-wide freight tonne kilometres (FTKs) grew by 9.2% in September, down from 11.6% in August.


This pace of growth was still well ahead of the five and ten-year average rates (4.4% and 3.2%, respectively). Moreover, when looking across the three months to September as a whole, FTKs posted their strongest year-on-year growth in Q3 since 2010. As we have noted before, the risks to our current forecast of 7.5% growth in FTKs for 2017 as a whole lie on the upside.


…although some more mixed signs emerging

However, September’s annual growth rate was the slowest since April, and the upward trend in SA cargo volumes has eased. FTKs grew at a 6% annualized rate between Q2 and Q3 – still a respectable pace but well below the 14-15% annualized rates seen during Q2 and Q4 2016, for example. In fact, while SA FTKs rose strongly in month-on-month terms in August, September’s decline means they have now fallen on this basis in three of the past four months.


FTK growth looks to have passed its cyclical peak
More generally, the continued slowdown in the yearon-year FTK growth rate adds to signs that cargo growth may have passed its cyclical peak. 


To be clear, the new export orders component of the global Purchasing Managers’ Index (PMI) remains well above the 50-mark that indicates growing export orders. This is consistent with other signs of an ongoing cyclical pick-up in wider global trade volumes. 


However, industry-wide FTK growth is strongly correlated with year-on-year changes in the PMI component rather than its level. This reflects the tendency of air freight to outperform during upturns in the economic and restocking cycle.


Highlights of the September 2017 Air Freight Market Analysis

  • Year-on-year growth in global freight tonne kilometres slowed to a 5-month low of 9.2% in September, but remained well ahead of its five and ten-year average growth rates.
  • The wider global trade backdrop remains robust, but the September data add to signs that the pick-up in air freight growth has passed its cyclical peak. The upward trend in seasonally-adjusted (SA) freight volumes eased in Q3.
  • International FTK growth slowed in year-on-year terms in all regions in September compared to August.
  • Cargo demand has continued to outstrip supply, however, which is boosting the industry-wide load factor. Download the full document here. 

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