<p>Q1 2023</p>
MACRO VIEW
Container volumes to major global consumer regions have dropped significantly more than the contraction in consumer demand this year. In North America, inbound container volumes decreased by 19.4%, while US retail sales grew by 5.1% in the first two months of 2023.
However, adjusted for inflation, retail sales only shrank by around 1%, failing to offset the variance. Shippers reduced inventory levels before importing new goods, with the business inventories to sales ratio at 1.34 in January, slightly lower than December's 1.36.
Meanwhile, China's exports have played a critical role in its economic recovery since H2 2020, compensating for sluggish domestic consumption. However, as demand for exports eases, attention shifts to the domestic economy, particularly consumer spending.
Investments in lower-risk countries like those in South East Asia, South, and Central America are increasing as manufacturers aim to safeguard their supply chains from potential geopolitical disruptions.
Despite future manufacturing plans, the prospects for container shipping remain bleak due to consumer caution and lower spending.
Although inflation may have peaked, consumers remain cautious and are not as eager to spend as they have been in the past few years.