Air Cargo Volume Points to Continued Economic Weakness

Here’s a nice alternative indicator from our friend Martin over at Macronomics.  He provides us with Nomura’s air cargo indicator and some more color on the current reading:



A regular economic activity and deflationary indicator we have been tracking has been Air Cargo. It is according to Nomura a leading indicator of chemical volume growth and economic activity:


“Over the past 13 years’ monthly data, there has been an 84% correlation between air cargo volume growth and global industrial production (IP) growth, with an air cargo lead of one to two months (second graph). In turn, this has translated into a clear relationship between air cargo and chemical industry volume growth”


Our air cargo indicator of industrial activity came in at -7.4% (y-o-y) in April, following -3.8% in March and -7.8% in February. As a readily available barometer of global chemicals activity, air cargo volume growth is a useful indicator for chemicals volume growth.”


Air cargo volume growth vs global industrial production growth, y-o-y, % – source Nomura:



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