According to the most recent International Air Transport Association (IATA) data, the demand for air cargo in Africa decreased in May, primarily as a result of the effects of the conflict that has been raging in Sudan since mid-April.
In comparison to May 2022, demand for African airlines fell by 2.4%. Comparing this performance to the prior month, it was lower.
Importantly, the expansion of the commerce route between Africa and Asia slowed noticeably in May from 18.5% in April to 11.0%, presumably as a result of the effects of the violence in Sudan since mid-April. In May 2022 vs May 2022, capacity increased by 9.2%.
When commenting on the overall low demand in May 2023, Willie Walsh, the Director General of IATA, stated that: "Trading conditions for air cargo continue to be difficult with a 5.2% decline in demand and various economic indicators pointing towards weakening. Nonetheless, the second half of the year should see some advancements. It is common knowledge that central bank rate increases will slow down when inflation softens in many economies. The need for air cargo should increase as a result, stimulating economic activity.
A slowdown in global industrial demand and a decline in demand for goods traded globally are the main variables affecting demand.
According to the global manufacturing Purchasing Managers Index (PMI), new export orders are down 1.4% annually, while production PMI is down 5.2% annually. April saw a 0.8% decline in global goods trade as a result of macroeconomic difficulties and supply chain limitations. Trade conditions appeared to be favorable for marine cargo because demand for container shipping declined by 0.2% while demand for air freight fell by 6.3% year over year.
From a low of 35 in October 2021, the global supplier delivery time PMI climbed to 54.5 in May, showing faster delivery times and some relief for supply chains. This also indicates a decline in the demand for items traded internationally.
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