Apparel Unfolding, Protectionist Absence Drive 6% Seaborne Import Growth | — Panjiva
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Apparel Unfolding, Protectionist Absence Drive 6% Seaborne Import Growth

  • By Christopher Rogers
  • · December 13, 2017
  • ·

U.S. import growth has continued to surge, with seaborne imports having expanded by 6% on a year earlier in November. The long-term rotation of manufacturing into emerging Asia and out of developed Asian economies continued. Apparel may be seeing a renaissance after volumes grew by 7%. Continued delays in trade reviews may have been the reason for an 8% expansion in steel imports. Looking ahead business and consumer confidence remains high, with a low likelihood of new protectionist measures in the very near term. As such, growth for 2017 as a whole could reach 3.8% vs. 2016 to reach a new record.

The growth in U.S. imports seen throughout 2017, with the exception of February, accelerated in November. Seaborne shipments climbed 5.6% on a year earlier, Panjiva data shows, reaching 10.625 million for the month.

NO SIGN OF SLOWING

Chart shows total U.S. seaborne shipments. Note data is provisional due to late reporting shippers. Source: Panjiva

The longer term trend of a rotation of manufacturing capacity, and related exports to the U.S., from the more-developed to less-developed Asian economies. Shipments from Vietnam soared 18.7% higher and those from Thailand climbed by 15.0% while those from Taiwan fell by 8.8% (the seventh straight drop) and from South Korea there was a 1.1% decline.

China remained the number one supplier after an 8.3% rise – it’s 2.6x the imports from the EU – and number one generator of the expanding U.S. trade deficit, as outlined in Panjiva research of December 5.

MANUFACTURING ROTATION DRIVES SHIPMENT SHIFTS

Chart segments U.S. imports by sea by country of origin. Bubble size indicates total shipments. Source: Panjiva

At the product level the most marked turnaround was the apparel sector. Imports expanded by 6.9%, the fastest rate of expansion since February 2016. That may indicate that the steady process of moving to leaner inventories may have reached a conclusion.

By contrast shipments of toys fell by 0.4% vs. the prior year after three months of growth, potentially as a result of the bankruptcy filing by Toys’R’Us as well as a rotation to electronics as gifts. Automotive imports also did poorly, with a 3.2% reduction tracking the downturn in sales of imported vehicles.

Among industrial products imports of iron and steel surged 7.7% after a small reduction the prior month. Continued delays in implementing the section 232 reviews of the industry by the Commerce Department have left the window open for suppliers to continue building inventory. Continued business confidence – and consumers’ appetite for electronics and appliances – drove the imports of electrical and electronics equipment 8.5% higher. That was the 18th increase in the past 19 months for the sector.

APPAREL APPARENTLY BACK IN FAVOR

Data for shipments segmented by HS code for furnishings (HS 9401/3), autos and parts (8703/8), apparel (61-64), toys (9504), steel (72,73), energy (27) and electronics / electricals (HS 84/85). Note data is provisional due to late reporting shippers. Source: Panjiva

Going into the last month of the year the conditions for growth look robust. Business surveys remain firmly in positive territory globally, albeit with a modest reduction in optimism in the U.S. more recently. Consumer confidence meanwhile has continued to rise, and reached its highest since November 2000, Bloomberg data shows.

Finally, it looks unlikely that the administration of President Donald Trump will enact broad-based protectionist measures before year end, and even if it does (for example the section 301 review of China) the impact won’t be felt until 2018. As a consequence, and on the basis of prior year’s patterns, U.S. import growth in 2017 overall could reach 3.8% (upgrade from 3.4% last month) or 11.56 million shipments.

SEASON’S GREETINGS TO A NEW RECORD

U.S. seaborne shipment data segmented by month Source: Panjiva

 

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