2013-01-31 09:01:45 - New Transportation research report from Business Monitor International is now available from Fast Market Research
While we remain optimistic toward Mexico's growth story over the medium-term, we foresee a slowdown in coming quarters as external demand moderates, feeding through to weaker consumer confidence and weighing on private consumption. We maintain our 2013 GDP forecast of 3.4% growth.
We expect slowing external demand will begin to weigh on the Mexican economy in coming quarters. Despite anticipating that 2013 will see a continued economic recovery for the US - Mexico's primary trading partner - pent-up demand for Mexican auto exports looks set to ease noticeably during the period, which could affect freight volumes. This will not only see net exports subtract more from headline growth in 2013, but we expect the resulting slowdown in Mexico's key manufacturing sector
to feed through to weaker consumer confidence, tempering private consumption, with a knock on negative effect on demand for containerised goods.
Full Report Details at
- www.fastmr.com/prod/529429_mexico_freight_transport_report_q1_20 ..
Headline Industry Data
* Rail freight tonnes forecast to grow 4.2% in 2013, with average annual growth of 4.7% during our forecast period to 2017.
* Road freight tonnes forecast to grow 3.0% in 2013, with average annual growth of 3.1% during our forecast period to 2017.
* Air freight tonnes forecast to grow 9.1% in 2013, with average annual growth of 8.9% during our forecast period.
* Port of Manzanillo total tonnage growth in 2013 is estimated to hit 6.4% growth to reach 28.8mn tonnes.
Key Trends And Developments
Highway Cargo Theft Costing US$9bn A Year
Rising cargo theft is having a serious impact on Mexico's road haulage sector.'Cargo transport theft on Mexico's highways caused a loss of US$9bn in 2009 and we can only suppose that this figure has increased significantly since then' said Mariana Tapia, consultant at think-tank Inteligencia Publica.
Thieves Derailing Freight Trains in Mexico
Rail theft continues to rise in some parts of Mexico as thieves develop new ways of stopping freight trains. Organised crime groups are carrying out thefts that have become a serious and costly issue for the two major railroad companies in the country, Ferromex and Kansas City Southern de Mexico (KCSM).
Construction Work Begins On Lazaro Cardenas Terminal 2
Netherlands-based container terminal operator APM Terminals formally started construction on the new Lazaro Cardenas Terminal 2 (TEC2) Pacific Coast deep-water terminal at the Mexican Port of Lazaro Cardenas in November.
Risks To Outlook
A major upside risk for operators in the Mexican freight transport sector is presented by the growing trend of 'nearshoring' - the practice of moving production centres closer to consumer markets. Increasing oil prices, rising wages, and weather disruption to supply chains has caused companies to look away from Asia and towards Mexico when considering where to base their production centers. Advantages to be gained from nearshoring in Mexico are lower freight costs, faster time-to-market rates and lower inventory costs. This trend should be of huge benefit to Mexican freight transport operators, as more production centers within the country means more volumes to transport to the US consumer markets.
On the downside, our outlook for the Mexican consumer remains sluggish. Consumer confidence surveys suggest that the Mexican consumer remains wary. Over the long term we believe Mexican consumer demand will continue to be undermined by the lack of competitiveness in key sectors, lack of fiscal reform and overdependence on the US economic cycle. Further downside risk to throughput at Mexican ports is presented in the form of sluggish US consumer sentiment. With 80% of exports still destined for the US market, growth is clearly dependent on the US economy not falling back into recession.
Another downside risk is presented by the lack of interest on the part of Mexican truckers in the NAFTA cross-border trucking pilot programme. BMI believes the success of the initiative is at risk unless more Mexican companies sign up to participate. Nevertheless, volumes of cross-border NAFTA trade is growing.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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