BIMCO’s Chief Shipping Analyst, Peter Sand, analyzes the Chinese economy and explains why he is not concerned regarding reports that it is slowing down. By examining certain key figures, Mr. Sand also finds positive signs, as well as early warnings for the shipping market.
As Peter Sand says, by looking at the purchase managers’ indexes (PMI), a drop in export orders could significantly affect the shipping industry in the future. Namely, such a decline it would be an indicator of weaker shipping demand.
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While a 50 PMI figure could mean a fairly stable business, a fall underneath this number is a warning signal. Currently, the Chinese PMI is at around 50-51, although the last six months the country saw this rate drop to 48. However, the figure has risen once again to slightly over 50.
Commenting on this situation, Mr. Sand believes that these are indicators of a nervous economy. Of course no one can predict with certainty what will happen, but the economic compass suggests that the world will face a slowed growth. China will not be an exception, but that does not mean that the global economies will step into negative territories.
While we may pretty much ignore China’s fabricated GDP, having a planned economy is in many ways the best thing for a shipping industry that is lacking demand or serious growth anywhere else in the world
Peter Sand concludes.
