2013-09-16 08:57:41 - New Transportation market report from Business Monitor International: "Australia Shipping Report Q4 2013"
In line with BMI's expectations for the Australian economy to struggle in 2013, real GDP growth in Q1 2013 slowed to 2.2% quarter-on-quarter (q-o-q) in seasonally-adjusted annualised terms, compared to 2.3% in Q4 2012. We expect the slowdown in private consumption to be the main drag on growth in the coming quarters, as job losses rise on the back of businesses cutting costs, triggering the beginning of household debt deleveraging. Together with our expectations for tepid export growth, we maintain our expectations for Australia's GDP growth to slow to 2.1% in 2013 compared with consensus expectations of 2.6% and 3.7% growth in 2012. With China facing its own slowdown in domestic demand, Australia's export growth is likely to remain tepid
despite the weakening Australian dollar, a scenario that will be detrimental to the Australian shipping sector. With the ongoing economic uncertainty in the eurozone and little increase in US demand for Australian exports, we do not expect a rise in externally-driven demand to outweigh the decline in domestic demand. As such, we maintain our outlook for GDP growth to slow to 2.1% in 2013, sharply down from the rate of 3.7% recorded in 2012. Indeed, we expect the debt deleveraging and economic restructuring processes to keep economic growth below the country's long-term average of 3.4% for the next decade.
Full Report Details at
- www.fastmr.com/prod/673271_australia_shipping_report_q4_2013.asp ..
Australia's goods and services balance recorded its first surplus in 14 months in March 2013, coming in at AUD307mn in seasonally-adjusted terms. The surplus in the merchandise trade account continued to increase, rising to AUD1,209mn in March 2013 from the first surplus of AUD839mn recorded in February. The growth in net merchandise exports helped offset the persistent services deficit, which came in at AUD902mn for the month.
Headline Industry Data
* 2013 Port of Melbourne tonnage throughput forecast to grow 3.00%.
* 2013 Port of Melbourne container throughput forecast to rise 3.14%.
* 2013 Port of Sydney tonnage throughput forecast to increase 0.43%.
* 2013 Port of Sydney container throughput forecast to increase 4.00%.
* 2013 Total trade growth forecast to contract by 1.72%.
Key Industry Trends
Falling Prices Jeopardise Viability Of Anketell Point Port: The federal environmental approval of the Anketell Point Port comes at a good time as new project cancellations pile up in Australia's mining industry. Although we believe that the port will be built, reduced iron ore demand and low iron ore prices pose a significant risk to its future revenue stream. The new port is aimed at processing and exporting iron ore produced by the planned West Pilbara project, which is currently developing stage 1.
Long-Term Leases On Botany And Kembla Sold: The New South Wales state government sold the longterm leases on two major Australian ports, it was announced in April 2013. The pair of 99-year leases on Port Botany and Port Kembla were purchased in excess of AUD5bn by a consortium led by Industry Funds Management (IFM), Reuters reported, which was higher than expected due to feverish demand for the leases.
Unions Criticise Port Waratah Coal Policy Changes: The International Transport Workers' Federation issued a warning to Australian coal exporter Port Waratah Coal Services at the end of June 2013 regarding its alleged failures to properly consult its workforce, according to the Hellenic Shipping News. Unions have organised industrial action following the company's efforts to alter its working agreements without the express consent of its employees. Union leaders have characterised the company's attempted move to outsource its workforce as driven by ideology, and not linked to productivity concerns.
Risks To Outlook
In a surprise leadership ballot for the ruling Australian Labor Party (ALP) held on June 26, Prime Minister Julia Gillard was ousted, while the challenger, Kevin Rudd, returned to the post of Prime Minister. The sudden switch back to the ALP's previous leader reflects the desperation within the party, given that the ALP has been projected by almost all major popularity polls to face an utter defeat at the upcoming federal election. With the return of Kevin Rudd and Gillard's retirement, the ruling ALP is hoping that the party will finally unite and have a fighting chance against the Liberal-National coalition.
In other news, the investment boom in Australia's mining sector is coming to an end, but economists believe that there is still strength in the economy, due to positive business spending expectations. The country recorded weaker-than-expected figures in private capital expenditure for the quarter ended March, but figures from the Bureau of Statistics are predicting stronger spending expectations for the 2013-14 financial year. The Australian shipping sector's fortunes are very much tied in with those of the mining sector and so any developments in the latter area will be viewed with intense scrutiny by the former.
Industrial action remains a challenge to Australian shippers, with walk outs continuing to occur during the first half of 2013. At the end of May 2013, more than 200 workers at the Port Waratah Coal Services (PWCS) terminal in Newcastle went on strike for 24 hours following the collapse of talks, The Herald reported. The negotiations between the unions and Port Waratah Coal Services centred on the use of contractors, as well as dispute-settling procedures.
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