Data from the International Air Transport Association (IATA) shows a continuing trend of recovering growth rates since February. In fact, July air cargo demand was tracking just 0.8% below the previous year’s levels. Although demand is now basically flat compared to 2022, this is an improvement on recent months’ performance.
“Compared to July 2022, demand for air cargo was basically flat. Considering we were 3.4% below 2022 levels in June, that’s a significant improvement. And it continues a trend of strengthening demand that began in February. How this trend will evolve in the coming months will be something to watch carefully. Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there are growing concerns over how China’s economy is developing. At the same time, we are seeing shorter delivery times, which is normally a sign of increasing economic activity. Amid these mixed signals, strengthening demand gives us good reason to be cautiously optimistic,” says Willie Walsh, IATA’s director general.
Key takeaways:
- Global demand, measured in cargo ton-kilometers (CTKs), tracked at 0.8% below July 2022 levels (-0.4% for international operations). This was a significant improvement over the previous month’s performance (-3.4%).
- Capacity, measured in available cargo ton-kilometers (ACTKs), was up 11.2% compared to July 2022 (8% for international operations). The strong uptick in ACTKs reflects the growth in belly capacity (29.3% year-on-year) due to the summer season.
- In July, both the manufacturing output Purchasing Managers Index or PMI (49.0) and new export orders PMI (46.4) were below the critical threshold represented by the 50 mark, indicating a decline in global manufacturing production and exports.
- Global cross-border trade contracted for the third month in a row in June, decreasing 2.5% year-over-year, reflecting the cooling demand environment and challenging macroeconomic conditions. The difference between the annual growth rates of air cargo and the global goods trade narrowed to -0.8 percentage points in June. While air cargo growth is still lagging world trade, the gap is the narrowest since January 2022.
- In July, the global supplier delivery time PMI was 51.9, signaling fewer supply chain delays. All major economies, except China, had PMIs above 50. The U.S., Europe, and Japan recorded PMIs of 54.2, 57.7, and 50.4, respectively.
- Inflation saw a mixed picture in July, with the increase in U.S. consumer prices picking up pace for the first time in 13 months. Meanwhile, in China, both consumer and producer prices fell, pointing to a possible deflationary economy.
- North American carriers posted the weakest performance of all regions, with a 5.2% decrease in cargo volumes in July compared to the same month in 2022, marking the fifth consecutive month in which the region had the weakest performance. It was, however, a slight improvement compared to June (-5.9%). The transatlantic route between North America and Europe saw traffic declining by 4.3% in July, 1.2 percentage points worse than the previous month. Capacity increased 0.5% compared to July 2022.
