Maersk said global contained volumes declined 3% year-on-year in the third quarter, while global air cargo volumes fell 9% over July and August (Andrew Matthews/PA)
(Picture: PA Archive)Fears of an imminent global recession deepened today when shipping freight giant Maersk sounded the alarm on dwindling demand for its containers amid the European energy crisis and sky-high inflation.
The Norwegian firm, often considered a bellwether for international trade, warned of “plenty of dark clouds on the horizon” as it slashed its forecast for global container demand for 2022 as a whole to a fall of two to four per cent compared with last year
The warning comes as former Bank of England governor Mark Carney also said he feared a widespread recession was unavoidable.
Speaking at the Hong Kong finance summit this morning, Carney said: “We’re headed for a global recession,” adding the trajectory for the economy was like trying to get a flight during the pandemic: “you know where you’re going, you just don’t know when you’ll get there.”
The growing fears about a global slump came ahead of the latest US interest rate decision from the Federal Reserve this evening. It is expected to order a further 0.75% increase in borrowing costs making it more likely that the world’s biggest economy will tip into recession. The Bank of England will make its decision on rates – also expected to a be a 0.75% rise – tomorrow.
The Chinese economy is also under pressure because of waves of severe Covid lockdowns.
Today Goldman Sachs analysts predicted that European natural gas prices would drop by about 30% early next year in part because of the marked slowdown in global demand.
Maersk CEO Søren Skou said: “With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon.
“This weighs on consumer purchasing power which in turn impacts global transportation and logistics demand…we expect a slow-down of the global economy to lead to a softer market.”
Imports from the Far East are estimated to have fallen by 6% in Europe, and they declined as much as 7.5% in the US. Vacancy rates for warehousing fell to near-historic lows, as businesses scrambled for extra storage space to hold their swelling inventory levels amid a drop-off in consumer demand.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: ‘’Despite high hopes of an easing of supply snarl ups would be fair winds for a smoother passage ahead, Maersk instead is spotting fresh dark clouds on the horizon, as consumer confidence is sideswiped by looming recessions around the world.
“The company has been riding a wave of surging demand and has been buoyed by a rise in freight rates but it sees that tide receding as demand for goods subsides amid cost-of-living headwinds. It sees the ongoing energy crisis, fuelled by the ongoing war in Ukraine, as a particularly bleak spot which is exacerbating the pain of inflation for consumers and companies around the world.’’
Maersk reported sales of $22.8 billion (£19.8 billion) for the three months to September, up 37% on the previous year, while profits jumped 64% to $8.9 billion. However, the firm said global contained volumes declined 3% year-on-year in the third quarter, while global air cargo volumes fell 9% over July and August. Maersk shares fell 5% to 15,325 in opening trade.
Further signs of worsening global trade emerged from Germany this morning, with news that imports fell by a worse-than-expected 2.3% in September, according to data from the German Federal Statistical Office, while exports also declined by an unexpected 0.5%.
