Boston, MA -- (ReleaseWire) -- 04/30/2014 -- BMI maintains its cautiously optimistic view on the US shipping sector. After estimated contractions in TEU throughput at both the port of Los Angeles and the Port of New York/New Jersey in 2013, we forecast a return to growth in 2014 at both facilities. Our view for gradual strengthening in the US economy through end 2014 continues to play out, driven by a tightening labour market and sustained growth in the cyclical components of the economy, notably the residential housing sector and business investment in equipment. Data have been particularly strong in recent months, and we acknowledge that risks are weighted to the upside.
Our 2014 growth forecast of 2.7% represents a bounce from 2013, and we believe that the risks to economic expansion remain predominantly to the upside. Our core view on the US economy is that the recovery is becoming increasingly entrenched, and that by 2014 many of the headwinds to growth, including government spending cuts, will be dissipating. Not only do we expect accelerating growth in 2014, we believe the US economy could be on the cusp of a multi-year period of stronger growth.
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Key Industry Data
- At the port of Los Angeles (LA) we forecast 3.9% growth year-on-year (y-o-y) in total tonnage in 2014, to reach 65.5mn tonnes.
- At the East Coast port of New York/New Jersey (NY/NJ), growth is forecast to be 3.1% y-o-y in 2014, to reach 139mn tonnes.
- We expect LA to record growth of 2.5% in twenty-foot equivalent unit (TEU) throughput in 2014, falling to 8.06mn TEUs.
- We expect NY/NJ to record a growth of 4.8% in TEU throughput in 2014, to reach 5.7mn TEUs.
Key Industry Trends
Portland Pins Its Hopes On Container Incentive Scheme
The port of Portland has announced an incentive scheme that it hopes will ensure that container lines continue to call at the port, with the facility specifically targeting its main box client, South Korean Hanjin Shipping.
Charleston Investing In Intermodal Growth Story
Intermodal traffic at the US port of Charleston has continued to increase, with volumes growing by 18% year on year (y-o-y) in 2013. The port is investing in its intermodal connections as it prepares to expand its role in the US container supply chain following the expansion of the Panama Canal.
LPG Production Pushing Higher
We maintain our view that US production of LPG (including ethane, propane, and butane) is set to push higher over the coming years. We have already seen output jump noticeably on the back of the shale boom such that net exports have risen from a modest 67,000 b/d in 2008 to an estimated 609,000b/d in 2012.
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