Maersk Warns ‘Dark Clouds’ Threaten Global Economy by Stalling Buying

Date: 02 November 2022 - 21:52

News ID: ۱۰۸۵۴۱

LONDON (Reuters) - Maersk, the world’s biggest container shipping company, has warned that “dark clouds” are on the horizon for the global economy as it forecast a slowdown in demand for freight services.
In its third-quarter earnings report Wednesday, the Danish company cut its 2022 demand outlook and pointed to factors holding back buying by consumers. The shipping giant is seen as a bellwether for the health of global trade.
“With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon,” Maersk CEO Søren Skou said in a statement alongside the report.
“This weighs on consumer purchasing power, which in turn impacts global transportation and logistics demand,” he added, saying the company expects a slowdown of the global economy.
The deteriorating economic environment has prompted many to predict that worse times lie ahead. The International Monetary Fund warned in October that the world is heading for recession that will be more damaging than expected.
Households’ real incomes — that is, adjusted for inflation — will fall as prices continue to rise and growth in wages stutters, the IMF said.
The unfolding economic slowdown is expected to continue into the coming year, Maersk said in its earnings report. Given that, it lowered its outlook for the growth of 2022 container demand to a decline of between 2% and 4%, from the lower end of the plus or minus 1% range.
Maersk beat Wall Street targets with third-quarter earnings of f$10.9 billion, compared with $9.8 billion forecast. Bit it said freight rates have peaked and are coming down faster than expected as consumer demand for goods falls.
Maersk shares were down 4.9% in Europe at last check Wednesday after the earnings release. The stock has dropped 39% since reaching an all-time high of 24,920 Danish krone in January.