Boston, MA -- (SBWIRE) -- 03/05/2013 -- GDP Forecasts Reduced Again

With general elections due at the end of 2012 and a series of poor data releases questioning the underlying health of the economy, BMI has reined in its projections for Japan. Against a background of still-weak global and Chinese demand, and a difficult domestic scenario, dominated by high debt levels and domestic legislative gridlock (which we don't see coming to a quick end under the new government) prospects for GDP growth are at best modest. We are now estimating growth of 0.5% in 2012, rising to 0.9% in 2013.

Both these numbers are lower than what we were hoping for in our last quarterly report, and the main risk lies on the downside. We cannot rule out a scenario where Japan drops back into recession in 2013. On the medium term we think growth will average a disappointing 1.1% per annum over the next five years.

While the gloomy economic picture acts as a constraint for the freight sector as a whole, there are some rays of light here and there. After sharp reductions in capacity, All Nippon Airways (ANA) and Japan Airlines (JAL), the country's two main airlines, are making profits again, and reporting some monthly increases in air freight carried. There are signs that the country's automobile exports are set to rise, boosting shipping companies active in this specialised area.

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Headline Industry Data

- Air freight tonnes forecast to grow by 1.0% in 2013 to 1.815mn tonnes, beginning a recovery after the estimated 10.0% contraction in 2012. Average annual growth over the next five years is expected at 1.8%, ahead of GDP.
- Road freight tonnes hauled in 2013 forecast to grow 2.6% to 4.842bn tonnes, with average annual growth also at 2.6% through to 2017.
- Rail freight tonnes will edge up by 0.3% in 2013 to 34.884mn tonnes, recovering from an estimated drop of 11.5% in 2012.We project average annual growth of 0.7% during our forecast period, slower than GDP.
- Port of Tokyo 2013 tonnage throughput forecast to grow 3.1% to 88.896mn tonnes, with average annual growth of 2.9% during our forecast period to 2017.
- Port of Nagoya 2013 tonnage throughput forecast to grow 1.2% to 188.918mn tonnes, with average annual growth of 2.8% over the medium term.

Key Trends and Developments

DHL Launches New Korea- Japan Service

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