April 2021

Global GDP growth revised up to 6.1pc in 2021

Global GDP is expected to expand by 6.1 per cent this year, revised up from 5.3 per cent in December as fiscal support is stepped up sharply, economies adapt to social distancing and vaccination rollout gathers momentum, said Fitch Ratings.

“GDP outturns were stronger than expected in 4Q20 – particularly in Europe and emerging markets (EM) – and world GDP declined by 3.4 per cent in 2020 as a whole, compared to our previous forecast of a 3.7 per cent decline,” said Fitch Ratings’ latest Global Economic Outlook (GEO)

World GDP is now expected to be 2.5 per cent higher in 2021 than in the pre-pandemic year of 2019.

“The pandemic is not over, but it is starting to look like we have entered the final phase of the economic crisis,” said Brian Coulton, Chief Economist.

Fitch now forecasts US GDP growth at 6.2 per cent in 2021 (revised up from 4.5 per cent), China at 8.4 per cent (from 8 per cent) and the eurozone at 4.7 per cent (unchanged). Growth in EM excluding China is forecast at 6.0 per cent (up from 5.0 per cent).

Unemployment forecasts for the major economies have been cut but job market recoveries continue to lag. Leisure and transport (L&T) industries are labour-intensive and are still afflicted by social distancing. US employment is still 6.1 per cent below pre-pandemic levels (compared to GDP which is 2.4 per cent lower), while L&T accounts for more than one-third of furloughed workers in the EU.


Global air cargo volumes edge up in February

Air cargo worldwide showed a year-on-year (YoY) weight increase of 1.1 per cent in February, accompanied by a yield/rate increase of 84 per cent, said WorldACD in a new report.

After a strong volume drop in the middle of the month, the end of the month showed a strong recovery.

Due to the annually changing dates of Chinese New Year (CNY), we traditionally look at the months of January and February together. Though counting one day less than in the leap year 2020, the YoY figures for these two months are + 0.9 per cent in weight and +79 per cent in yield/rate (in USD). Within the two months’ period, yields/rates increased by 4 per cent MoM and the load factors went up by 3.2 percentage points MoM.

 However, as always, worldwide averages need to be broken down in order to get the real state-of-affairs. Volumes are the best indicator of where things stand over a longer period: we compared the period Jan/Feb 2021 with the corresponding periods in the past three years.

 Asia Pacific, one of the six main regions charted by WorldACD, is in a class of its own, emphasising the increasing importance of the region in world trade. Except from the sub-region Australasia and the Pacific (-26 per cent YoY), air cargo exports kept growing, particularly from the sub-regions China and North East Asia, showing YoY growth figures of 46 per cent and 24 per cent respectively. The entire region’s air cargo output grew by 19 per cent YoY, by 14 per cent vs 2019, and by 6 per cent vs the bumper year 2018. In imports, Asia Pacific was 7 per cent above 2020, 2 per cent above 2019, but 4 per cent below 2018. It is noteworthy that the business intra-Asia Pacific grows much less than the exports to other regions.

For the other 19 “sub-regions”, the picture is drastically different. Apart from 3 small sub-regions (Central Africa, Mexico and Central Asia), all sub-regions showed a decrease in outgoing business in 2021 compared to each of the three foregoing years. Hardest hit are South Asia, with a decrease of around 24 per cent vs each of the three earlier years, North Africa (-23 per cent YoY), Southern Africa (-20 per cent YoY), the Gulf Area (-17 per cent YoY) and Canada (-16 per cent YoY).


Separation machinery market to grow at 4.2pc

The Separation machinery market is set to grow from its current market value of more than $82.6 billion to over $110.6 billion by 2027, gaining remarkable traction over the 2021 to 2027 period, according to market research firm Global Market Insights.

The separation machinery market is set to witness promising growth over the forthcoming time period owing to increasing pharmaceutical expenditure across the globe, expanding HVAC industry, rising adoption of industrial sieves in food industry, flourishing chemical industry, and increasing use of stage separators in the fuel and biofuel industry. Material separation is an essential first step in the recycling process. The precise separation equipment properly tuned for a certain application will always play a key role in forming a greater recovery rate.


Construction equipment rental sector to hit $155bn

The global construction equipment rental sector is poised for solid growth over the next five years with its market value likely to surge to more than $155 billion by 2026 from its present $120 billion, gaining remarkable traction over the 2020 to 2026 period, according to a recent study from market research firm Global Market Insights.

The market for renting equipment has surged over the recent years with some construction firms buying as well as maintaining large fleets of equipment. Other firms select to lease these assets and, in some instances, they buy select pieces at the end of the arrangement. Renting equipment has become one of the feasible options for numerous companies and gives them the capability to reduce costs and operate a more financially settled construction business, said the Global Market Insights report.

 The construction rental equipment market is likely to witness rapid growth over the coming time period owing to rising government focus on development of robust public infrastructure, high product demand from small and medium scale construction contractors, and increasing adoption of concrete equipment, material handling and cranes, and earthmoving equipment on a rental basis, it stated.


Global copper production to recover by 5.6pc

After two consecutive years of flat growth, mainly due to lower ore grades and the production disruptions, the impact of Covid-19 on mining operations led to global copper production declining by 2.6 per cent to 20.1Mt in 2020.

Looking ahead, global copper production is expected to experience growth of 5.6 per cent to 21.3kt in 2021, supported by mines returning to full production, as well as the ramp-up of new mines starting in 2021, according to GlobalData, a leading data and analytics company.

Production is expected to reach 24.6Mt in 2024 – a CAGR of 5 per cent. Chile, Peru, Australia, Indonesia, and the US will be the key contributors to the growth. The combined production from these countries is expected to grow from 11.2Mt in 2021 to 13.4Mt in 2024. The majority of the impact occurred during the second and third quarters of 2020 when the production from the top 10 producers fell by a collective 3.5 per cent and 2.4 per cent, year-on-year (Y-O-Y), respectively.  

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