Chart of the Day - Europe Air Cargo vs PMI pointing to economic slowdown

"Admire a small ship, but put your freight in a large one; for the larger the load, the greater will be the profit upon profit." - Hesiod 

We previously indicated that Air Traffic is a good indicator of economic activity (see our post "Air Traffic is pointing to additional economic activity" - 15th May 2013). Looking at the negative Italian GDP print at -0.3% YoY as well as the -3.2% print for German factory orders, we decided to have a look again at Air Cargo, in particular towards Europe International Cargo vs PMI as displayed by Deutsche Bank in their "Air Cargo Market Analysis note from the 6th of August 2014:

"We are seeing Europe materially lag the peer group. Other key cargo markets are reporting improving growth trends whereas Europe's data to June is still in decline."

- source Deutsche Bank

Europe Domestic Cargo vs PMI is as well pointing towards weaker economic activity ahead:

Europe represents a market share of 26% of the International Air Cargo Market and 23% of the Domestic Air Cargo Market.

Both points to additional weaker economic activity in Europe we think. There is indeed a big disconnect between PMIs and Air Cargo.

"A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad." - Theodore Roosevelt

Stay tuned!