EU retail sales volumes fall 1.3%, indicating further weakening of container imports
In June 2022, EU retail sales volumes fell 1.3% compared to May, and were 2.8% lower than peak sales achieved in November 2021 but remained 5.9% higher than average pre-COVID volumes in 2019. In the UK, retail sales volumes have meanwhile been on a steady decline since peaking in April 2021 and were in June only 1.4% higher than the 2019 average.
“Retail sales volumes in Europe have not seen the same growth during COVID as in the US where the volumes in June 2022 remained 14.5% higher than the 2019 average. This has also reflected on container volumes, and according to Container Trades Statistics, global container exports to Europe in June 2022 were 5.2% lower than in June 2019, whereas to North America, they were 18.8% higher,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Meanwhile, consumer confidence in the EU reached a new record low in July and in the UK, it remained at the record low level seen in June. Indicating contraction in the manufacturing sector, the July manufacturing PMI for the euro area also dipped below 50 for the first time since mid-2020. Lastly, it should be mentioned that goods inventories held by companies in the European Union grew at record pace during Q4 2021 and Q1 2022.
“All in all, indicators appear to point towards a further weakening of global container exports to Europe in the coming months. In the meantime, the key driver of freight and charter rates remains congestion, which is unlikely to change much even if exports to Europe fall even more,” says Rasmussen.
Source: BIMCO, By Neils Rasmussen, Chief Shipping Analyst