Boston, MA -- (ReleaseWire) -- 02/28/2013 -- Following 2012, a year in which BMI believes saw freight volumes decreasing, 2013 look set to signal the return to growth in all freight modes.
Total trade is projected to pick up with our Country Risk desk forecasting a year-on-year (y-o-y) increase of 5.11% in 2013 following an estimated growth of 2.56% in 2012.
Road freight is to continue to dominate the sector and is projected to grow by 1.5% in 2013. To the end of our forecast period to 2017, we expect the sector to defy the European Union (EU) pledges of a decrease in road haulage across the region. That is not to say, however, that road freight's market share is safe.
BMI notes that rail is the likeliest candidate in Hungary's freight transport mix to benefit from any diversification away from road.
Headline Industry Data
?? 2013 Air freight tonnage is expected to grow by 2.9% ?? 2013 Rail freight is forecast to grow by 3.8% ?? 2013 Road freight is forecast to grow by 1.5% ?? 2013 Inland waterway freight is forecast to grow by 1.5% ?? 2013 Total real trade growth is forecast at 5.1%
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Key Industry Trends
MAV Looking for Asia-Europe Role
Hungarian state-owned railway operator MAV is seeking to expand its remit by playing a role in linking the passage of goods by rail from Asia into Europe. The scheme has been steadily developing as a quicker alternative to sea freight. If Hungary is able to play a role in the project it will offer upside risk to our forecasts for the country's rail freight sector over the medium term.
DHL Given Huawei Contract
Chinese telecommunications firm Huawei has signed Germany-based logistics specialist DHL Supply Chain to deliver logistics solutions for its Hungarian telecommunications business. DHL will package and transport components and raw materials by sea and road to Huawei's supply centres in Pecs in south west Hungary and Komarom in north west Hungary.
Risks to Outlook
The continued deterioration in economic activity in the eurozone and the failure of the government to thus far reach an external financing arrangement with the IMF/EU, the country's external environment remains decidedly weak and Hungary's growth outlook is threatened by a number of downside risks.
The major downside risk for freight operators' volumes in Hungary is a worse than expected downturn in the eurozone economy would have a major knock-on effect on Hungarian economic activity and the likely slowing in growth of the country's exports, with Hungary's top trade partners located in Europe.
Domestic demand has yet to stage a meaningful recovery in Hungary, meaning imports will not significantly drive up the growth of freight volumes, as we still expect private demand, gross fixed capital formation and government expenditure to all register real declines in 2012.
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