March retail volumes at 0.0% m/m as EU retail trade stagnates
The so-called Far East to Europe trade includes trade into North Europe as well as countries bordering the Mediterranean and Black Sea. Within this definition of Europe, the twenty-seven countries in the European Union (EU 27) make up 55% of economic activity. Still, retail trade in the EU 27 has in the past shown a strong correlation to overall Far East-Europe trade volumes.
“Retail trade in the European Union has stagnated. March numbers showed no increase over February and growth of only 1.4% over the last year. In fact, during the last 11 months, retail trade has been within ±1.3% of the March numbers,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Despite slower average economic growth during the COVID-19 pandemic, retail trade remains 1.6% ahead of the pre-COVID trendline prediction. This could indicate that a downward adjustment is not far off.
In fact, The EU consumer confidence reading for April showed the second lowest reading on record. Only the April 2020 reading was worse and back then retail trade dropped to the lowest level in fifteen years.
“It is unlikely that retail trade will drop as low as in April 2020 this time around, as lockdowns so far in Europe appear to be a thing of the past,” says Rasmussen and adds “In the meantime, there are clear signs of a softening. The key for the Far East to Europe container trade will be whether consumers will simply buy less or replace more expensive items with cheaper ones in which case container volumes would be less affected.”
Source: BIMCO, Chief Shipping Analyst, Niels Rasmussen