SINGAPORE: Muted growth for Singapore’s air cargo market
The recovery in airfreight has taken Singapore’s air cargo market back to pre-crisis levels with an expected 3.75 per cent growth in airfreight tonnes in 2010 as it only declined -3 per cent in 2009, according to Business Monitor International (BMI). The growth over the forecast period is expected to be more muted with an […]
November 1, 2010
The recovery in airfreight has taken Singapore’s air cargo market back to pre-crisis levels with an expected 3.75 per cent growth in airfreight tonnes in 2010 as it only declined -3 per cent in 2009, according to Business Monitor International (BMI). The growth over the forecast period is expected to be more muted with an average of two per cent over the forecast period. Singapore Airlines has become entangled in a number of anti-competition cases with it alleged to have fixed air cargo rates and could face massive fines at a time when it is struggling to maintain its profitability, BMI said in the report. Singapore is expected to have real trade growth in 2010 of 11.7 per cent and an average of 6.5 per cent over the forecast period. This is a considerable recovery from the -10 per cent contraction of real trade growth in 2009, said BMI. Total trade is expected to be US$805.8 billion in 2010, which compares favourably with the US$826.7 billion in 2008 and is a strong recovery from the US$682.7 billion in 2009. This rebound has been powered by the continued growth in China and the resilience to the downturn in the global economy by the Asia Pacific region. If China’s growth starts to fail then Singapore’s level of trade will also be hard hit. Singapore freight companies will be lifted by the V-shaped local economic recovery with BMI is predicting GDP growth of 7 per cent this year, against a backdrop of political stability and a strong fiscal position. However, BMI believes that the current strong pace of expansion will not be sustainable and that Singapore’s GDP growth will ease to 4.3 per cent in 2011 as both the US and Chinese economies cool off, after world trade has spurted back to almost pre-crisis levels. Another factor in the continued success of Singapore as a trading centre has been the investment in logistics, according to BMI. The government through its Economic Development Board has been very keen to encourage investment in this area which amounted to S$481 million (US$346 million) in 2009 and between S$400 million and S$500 million (US$287.77 – US$359.72 million) is expected to be invested in 2010. The key developments in Singapore in 2009 included Zuellig Pharma’s Speciality Solutions Group headquarters for its new bio-logistics services in Singapore and TNT’s new regional air hub which connects the company’s air networks with its Asia Road Network. In 2010, DKSH opened a global centre for finance and executive training in Singapore and United Parcel Service chose Singapore for one of two new health-care-logistics hubs.