Argentina Freight Transport Report Q2 2012
Business Monitor International, February 2012, Pages: 46
Business Monitor International's Argentina Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Argentina's freight transportation industry.
BMI remains concerned about the effects of Argentina's soaring inflation on the country's freight transport sector. BMI believe that the Argentine government has artificially propped up growth during recent years. This should continue to support real term expansion over the coming quarters, but BMI believe that this government-led growth is ultimately unsustainable. BMI expect real GDP growth to cool to 4.1% in 2012, down from growth of 7% in 2011.
With port workers and others trying to secure pay increases in line with the country's soaring inflation, BMI expect the threat of strikes at the country's ports to remain a risk. Further threats to the freight transport sector come from the barriers to import that recently re-elected President Cristina Fernández’ administration has been constructing. A potash project led by Brazilian mining giant Vale in Argentina stalled in 2011 when it was claimed the miner was not obeying rules concering the use of local matierials and workers. Despite the country's rich natural resources, it is possible the political and economic situation there could deter investors in the future.
Headline Industry Data
- Total volume at the Port of Buenos Aires is set to rise by 4.7% in 2012 to reach 13mn tonnes.
- Air freight volume growth is set to grow by 5.0% to 175,100 tonnes in 2012, with average annual growth of 4.2% during our forecast period.
- Rail freight hauled in 2012 will grow by a modest 2% to 22.70mn tonnes, with average annual growth of 2% during our forecast period.
Key Industry Trends Soaring Inflation Sees Truckers Go Against The Grain, Port Blockades Threaten Exports Strikes continue to plague the Argentine port sector as the country's transport workers demand pay increases in the face of spiralling inflation rates. With President Fernández having won her recent reelection bid, BMI expect her administration to attempt to cool inflation over the medium-to-long term. In the short term, however, BMI expect that labour unrest will continue, potentially jeopardising exports during the country's main wheat exporting season.
Skanska Wins Rail Contract As Vale Expedites Argentine Potash Project Vale is pushing ahead with the development of its Argentine potash mine, despite the obstacles faced in 2011. The company has just awarded a ARS570mn contract for the construction of a rail link between the mine and the Port of Bahía Blanca. BMI notes that the railway will provide a boost to the country's underdeveloped freight transport network, which is handling rising volumes as demand for commodities exports increases and the country handles growing volumes of transit trade from its landlocked neighbour Paraguay.
Key Risks To Outlook Key risks to our outlook are on the downside. BMI maintain our view that Argentina faces strong economic headwinds. Soaring inflation, fiscal profligacy and growing government intervention mean the Argentine economy will struggle to sustain its current growth trajectory, as investors become increasingly cautious of the economy.
Monetary and fiscal expansionary policies will continue to support economic growth at the expense of inflation, with the possibility of a sharp adjustment, such as a devaluation of the currency, still looming. Government policies have resulted in an economic environment that provides few incentives to long-term investment commitments. This could exacerbate capacity problems in the long run. The trade surplus has been boosted by high commodity prices and currency weakness, and is vulnerable to any reversal of these factors.
Executive Summary
SWOT Analysis
Argentina Freight Transport Industry SWOT
Argentina Political SWOT
Argentina Economic SWOT
Argentina Business Environment SWOT
Industry Trends And Developments
Road
Maritime
Rail
Market Overview
Table: On Track For Investment
Industry Forecast
Maritime Freight
Table: Maritime Freight - Throughput, 2007-2016 ('000 tonnes)
Air Freight
Table: Air Freight, 2007-2016
Rail Freight
Table: Rail Freight, 2007-2016
Trade
Table: Trade Overview, 2007-2016
Table: Key Trade Indicators, 2007-2016 (US$mn and % change y-o-y)
Table: Argentina's Main Import Partners, 2002-2009 (US$mn)
Table: Argentina's Main Export Partners, 2002-2009 (US$mn)
Global Oil Products Price Outlook
Political Outlook
Domestic Politics
Long-Term Political Outlook
Macroeconomic Outlook
Table: Argentina – Economic Activity, 2011-2016
Company Profiles
Ultrapetrol
América Latina Logística (ALL)
Aerolíneas Argentinas
Agunsa
Country Snapshot: Argentina Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education
Table: Life Expectancy, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Manufacturing Wages, 1995-2001
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Sources
- Ultrapetrol
- América Latina Logística (ALL)
- Aerolíneas Argentinas
- Agunsa
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