Prime Freight’s summary of a May 2022 report by Bloomberg. Read the original for the full story.
In May 2022 Bloomberg reported that manufacturers across Asia, from apparel makers to consumer electronics firms, were seeing the first signs that the pandemic-era rush of export orders was slowing.
Factory owners said buyers in the US and Europe had become more cautious as inflation and higher interest rates squeezed household budgets, and as spending moved back from goods to services. Hong Kong-listed clothing maker Lever Style saw weaker orders for fourth-quarter delivery, ProVista Group said demand for its recreational-vehicle power systems was softening after record years in 2020 and 2021, and Musical Electronics reported fewer orders for speaker systems since March.
Broader indicators agreed. The WTO had lowered its 2022 forecast for growth in merchandise trade from 4.7% to 3%, purchasing managers’ data showed Asian manufacturing shrinking in April for the first time since mid-2020, and nine of ten indicators in Bloomberg’s trade tracker were below their long-run averages. Lockdowns in China, the war in Ukraine and full inventories all weighed on trade, although analysts stressed that this was a slowdown rather than a trade recession, with US consumer spending still rising.
What it meant for shippers
Weaker export orders usually reach freight demand a few months later. Following factory order trends alongside freight indices helps shippers judge how much space to commit to and when to negotiate contract rates.