Recently published research from Business Monitor International, "Brazil Shipping Report Q4 2012", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 11/10/2012 -- We have revised down our 2012 headline real GDP growth figure for Brazil significantly, from 3.9% to 2.4%. The country's structural economic imbalances, namely a very strong consumer and a weak manufacturing sector, are beginning to unwind sooner than we initially anticipated.
Despite moderating our macro view, BMI believes 2012 will be another year of strong growth for Brazilian ports as the country's consumer demand for imports and external demand for commodities exports continue to drive volumes for the time being. Although we expect a healthy level of growth to continue during our forecast period, we caution that there are a number of risks to our outlook for the country's booming shipping sector, including the infrastructure deficit and signs of overheating in the Brazilian economy.
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BMI notes that Brazil's transport network has not yet developed the infrastructure needed to handle increasing throughput levels, causing severe delays and increased costs for shippers. As such, we expect to see more investment in infrastructure, both public and private, as ports seek to deal with growing traffic and to capitalise on increasing trade opportunities.
Brazil's rapid economic growth has been aided considerably by the country's strong commodities mix. However, we caution that much of the demand for Brazilian exports of raw materials has come from China. With a slowdown in Chinese economic growth looking increasingly likely, we are concerned that demand for the country's raw materials could weaken.
On the domestic consumer demand side, we are concerned about the possibility of a slowdown in consumer spending in the coming months. This could result in a repricing of Brazil's previously unstoppable consumer growth story, hitting demand for imports of containerised goods.
Key Industry Data
Total tonnage throughput at the Port of Santos to grow 12.2% in 2012 to reach 109mn tonnes. To 2016, we predict average annual growth of 10.5%. ?? Container throughput at Santos to grow 16% to reach 3.5mn twenty-foot equivalent units (TEUs) in 2012, with average annual growth of 10% during our forecast period.
Key Industry Trends
Port Congestion Necessitates Infrastructure Improvements
BMI believes that, given the significant role of agricultural trade in Brazil's economy, the country must invest in canopies at its dry bulk terminals in order to avoid further congestion problems. We maintain that if investment in canopies is made promptly it will support growth in the country's agricultural exports over the medium term.
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