World Bank forecasts less pessimistic for global logistics

The World Bank published on Tuesday (January 17) revised forecasts of global growth over the next twelve months.

Its ‚Global Economic Prospects‘ report headlined it’s opinion that "developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects".

As a result, the World Bank has reduced its forecasts of growth in the developed world from 2.7% to 1.4% in 2012. For developing economies, it has reduced its forecast from 6.2% to 5.4%. Even more importantly for the logistics market, world trade is projected to grow at 5.2% in 2012 compared with 6.6% in 2011. Indeed, the World Bank is of the opinion that trade had already begun to slow appreciably in the last quarter of 2011.

Whilst these forecast revisions are generally being regarded as a sign of the worsening economic climate, a growth rate of 5.2% does suggest a continuation of the impressive levels of expansion seen over the past couple of years in global trade. Possibly, the World Bank’s tone of pessimism is driven by its belief that the underlying ‚trend‘ growth rate of world trade is even higher. For example, in 2013 the World Bank estimates that growth will compensate for the revised 2012 forecast, seeing expansion at over 7% per annum; a level which the Bank believes ought to be sustained for possibly another four years if the potential of global trade is to be fully achieved.

The implication of these forecasts is that logistics businesses with substantial exposure to global trade routes are likely to do much better in the coming year than those who are domestically focused.

A further beneficial factor of lower growth prospects for global LSP’s is its affect on the oil price. The International Energy Agency has said that in the last quarter of 2011 consumption fell for the first time since 2009. Growth in demand is generally moderating and despite the tensions over Iran this may make the outlook for oil prices much softer.In contrast to the outlook for much of the rest of the economy, the prospect of a combination of lower oil prices and continuing growth in demand would suggest that the prospects of many logistics sub-sectors will still be promising in 2012.

Quelle: eyefortransport
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