Weak US retail sales drag down container traffic

07 February 2008 20:24  [Source: ICIS news]

HOUSTON (ICIS news)--Traffic at the major retail container ports in the US could grow only slightly or even drop in the upcoming months, a trade group said on Thursday, a bad sign for an industry that uses large amounts of plastic for packaging and products.

“Container traffic at the ports is a leading economic indicator because it reflects retailers’ expectations for sales," according to a statement issued by Jonathan Gold, a vice president of the National Retail Federation.

The federation released the report with Global Insight.

Much of the packaging used by retailers is made of polyethylene (PE), polypropylene (PP) and polystyrene (PS). In addition, packaging also consumes plastic additives.

The ports in the survey handled 1.3m twenty-foot equivalent units (TEU) of container traffic in December, down 6.4% from November and down 0.9% from December 2006, the federation said.

The group estimates that January's container traffic will drop 1.1% from the same time last year. February could drop 7.6%.

If the forecasts hold true, February will be the seventh month in a row to show a year-over-year drop in traffic, as retailers reduced imports to reflect sales expectations, the federation said.

In other news, US retailers experienced their weakest January performance in nearly 40 years, according to the UBS-International Council of Shopping Centers survey.

The survey sows that same-store retail sales rose by 0.5% over January 2006. It was the weakest January in the survey's 39-year history.

January's performance was dragged down, in part, by mismatched fiscal calendars, the council said. The post-Thanksgiving period had an extra week in 2007. However, weak consumer spending was the main reason for the lacklustre month, the council said.

Comparable-store sales should remain soft in February, growing by about 1% year-on-year, the group said.

By: Al Greenwood
+1 713 525 2653

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