CHINA'S LOGISTICS INDUSTRY

Players Lacking Confidence in China's logistics industry

1. The result of a survey done show that confidence in the present state of the logistics market has, overall, fallen slightly over the past month. The Index dipped from +6.36 to +1.04. Any result above 0 is positive, with a maximum of +100 and a minimum of -100. However looking ahead, respondents were slightly more optimistic than in the previous survey. Confidence in the state of the market in 12 months time was still negative (-20.02) but not as weak as previously indicated (-26.46 in February).

2. The survey revealed that confidence in China has slumped. From being the most confident country in February (+34.38), the index fell sharply into negative territory -13.33. Chinese logistics executives are even less confident about the prospects for the industry in twelve months time. The index fell to -43.33, the lowest of all regions/countries analysed.

3. On the positive side, although confidence amongst US respondents in the present state of the market also fell from February to March (-4.29 to -6.82), there is much more confidence in the state of market over the longer term. The index improves to -4.55 compared with February's 12 month outlook of -17.14 which although still negative is at least moving in the right direction. Whether this is just a temporary improvement in sentiment, perhaps driven by the new US government's re-financing package, will be seen.

4. The Consumer/retail sector showed a worrying weakness in March. Confidence amongst logistics managers in the sector dropped from positive to negative in the period. Unsurprisingly given the worries over the viability of many automotive manufacturers, the automotive sector is the least confident about its long term prospects.

5. As far as individual logistics segments are concerned, executives in the Express Parcels industry were the most confident in its present state (+14.71) and were least negative about its prospects for the next twelve months (-7.35). Once again shipping executives were the most gloomy, the sector reporting an index of -46.15.