Weekly News Update – 5/5/23
Manufacturing industry performance holds largely stable in April
While the manufacturing industry saw only modest gains in production levels and customer demand compared to March, the industry may be on its slow way back to economic growth, according to two national economic indices.
The Institute for Supply Management’s Report on Business posted a Purchasing Managers’ Index at 47.1%, a 0.8 percentage point increase from March, marking a fifth month of consecutive economic contraction.
S&P Global’s US Manufacturing PMI edged into growth mode this past month, with a reading of 50.2, the first time the index has reached above 50.0 since October 2022. A reading over 50.0 indicates economic expansion in the industry.
Study: Heavier Fog Will Affect Shipping Safety in a Warming Arctic
The Arctic is going to become easier to navigate as ice recedes, but it is also going to have more of a marine weather condition that mariners tend not to like: heavy fog.
According to a new study published in Geophysical Research Letters, rapidly retreating sea ice in the Arctic will open up new shipping lanes – as already seen on Russia’s Northern Sea Route – but vessel operators will have to take into account a higher incidence of fog. According to the study, safety slowdowns due to fog will add up to 1-4 days to a voyage’s transit time, and may force weather routing choices to optimize for less transit time through foggy areas.
2nd-half freight rebound increasingly unlikely
Across the physical economy, executives and analysts are projecting that the second half of 2023 will bring a rebound. That includes containerized U.S. import volumes, which sees its peak season in late summer to autumn. Some believe U.S. import demand has hit the bottom.
However, further downside risks have emerged for the U.S. economy. It’s wrecking the odds of a second-half rebound in import volumes.
Last June, SONAR’s ocean container bookings data revealed that U.S. import demand for containerized goods was dropping off a cliff, just a few months after FreightWaves’ U.S. truckload data first signaled that a freight recession was imminent. Now, the freight recession of 2023 has officially arrived.