2014-01-23 17:54:34 - New Transportation research report from Business Monitor International is now available from Fast Market Research
We are revising down our 2014 real GDP growth forecast for Chile to 4.2%, from 4.6% previously, as the country's H113 economic performance has reinforced our conviction that lower commodities prices and weakening external demand for industrial metals will weigh on Chile's economy over a multi-year timeframe. Indeed, real GDP growth in Chile came in at 4.3% year-on-year (y-o-y) during the first half of 2013, directly in line with our forecast for annual headline growth of the same figure, which would mark a drop from average expansion of 5.7% from 2010-2012, during the Chinese investment-led bull-run in global commodities.
Lower copper prices will place renewed importance on shifting away from export- and investment-led growth to a more diversified economic growth trajectory,
one that is more reliant on private consumption. If private consumption takes an increased share of Chile's economy, we may see increased growth in air freight, as well as in maritime container volumes, as both freight modes are used to carry consumer goods. Rail freight, however, will be hit hard by a move away from mining, as will gross tonnage volumes at Chilean ports.
Full Report Details at
- www.fastmr.com/prod/760693_chile_freight_transport_report_q1_201 ..
Headline Industry Data
* Air freight tonnage is forecast to rise by 5.3% in 2014 to reach 352.6mn tonnes.
* Total tonnes at the port of Valparaiso forecast to rise 1.7%, to 10.67mn tonnes in 2014, with average growth of 3.0% over the next five years.
* Rail freight tonnage is forecast to grow by 0.9% in 2014, reaching 27.63mn tonnes, with average growth of 1.2% over the next five years.
Key Industry Trends
Fined For Price-Fixing: In the last quarter of 2013, LATAM Cargo was fined by a Canadian court of price-fixing. LATAM admitted the charges, and was charged US$938,000. The charges related to the period before the merger airlines' merger, when LAN was still a separate entity. They related to fuel surcharges it placed on air freight shipments between Canada and Latin America and elsewhere from 2003 to 2006.
Investment In Port Infrastructure Supports Growth Forecast: Considerable investment in the expansion of Valparaiso Port confirms our positive outlook on Chile's ports infrastructure and the wider construction industry. After strong growth in the Chilean construction industry in the last two years, we currently forecast 6.4% real growth in 2013 and an average of 5.3% between 2014 and 2022.
Casual Port Workers Threaten Strike Over Debt: Casual workers at Chile's ports have threatened to go on an all-out strike unless a dispute with the tax authorities regarding additional payments is resolved. The tax authorities had removed a discount in September 2010 that exempted such workers from paying extra second category income tax.
Risks To Outlook
The risks to our outlook are mainly on the downside. One risk is the possibility that Chile will not be able to improve its freight transport infrastructure to keep up with demand. Infrastructure deficits limit expansion. If Chile does not improve efficiency and capacity, there is risk that, as ports and road and rail networks begin to reach the limits of their capacity, importers will look elsewhere for their supplies.
Secondly, we remain concerned about the effects of decelerating economic activity in China, which over the next few years will result in weakening for Chilean copper exports and will have a negative knock-on effect on the country's freight volumes.
Thirdly, there is risk that strike action could disrupt operations, as casual port workers have threatened to walk out.
Report Table of Contents:
The table of contents for this report is available upon request.
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