On the manufacturing front, the US factory index of the Tempe-based Institute for Supply Management rose more than two points to 42.8 in April from 40.1 in March. The figure was half a point higher than economists had forecast, meaning US manufacturing, though still losing ground, shrank at a slower rate than anticipated.
Other ISM indexes were also up from a month earlier, with the production index rising to 46 from 40.4 and the export orders index climbing to 48 from 44. The production index reading was the highest since August. Perhaps most importantly, the new-orders index jumped to 51.1 from 47.2. Readings of less than 50 for all measures show contraction, while readings above 50 show growth.
Some freight sectors also appear to be picking up. The May index of US domestic shipping from Cass Information Systems Inc. in Bridgeton, MO, though down 21.4% compared to a year earlier, was up 4% percent compared to April. Cass analysts say the change suggests the decline in the freight transportation economy has begun to level off. The index fell a record 25% percent in April on a year-over-year basis.
Though the Cass shipments index of 0.913 for May was one of the lowest measures for freight shipment in the last 15 years, it was nonetheless one of the highest monthly levels this year. The Cass freight expenditures index experienced a record year-over-year decline in May, falling 29.4%, but analysts point out the drop to some extent reflects the fall-back in fuel prices from near-peak levels in May '08.
Global air-freight volumes are also starting to rise after months of unprecedented declines, according to the International Air Transport Association. The Geneva, Switzerland-based organization says a recent upturn in business compared to preceding months may signal a bottoming out in the worldwide airfreight market. Though the industry registered a 21.7% year-over-year decline in air cargo in April, the decline was lower than in preceding months.
According to IATA statistics, carriers in all regions showed double digit declines, though Middle Eastern carriers showed the lowest decline at -11.1%. European, North American, Asia-Pacific and African carriers had drop-offs in the 18.8% to 23.3% range. Latin American carriers experienced the largest decline at 24.2%.
IATA economists say recent patterns indicate the industry may have bottomed, but it warns that until inventories adjust to more normal levels, air freight volumes will likely continue to bounce along the bottom. "With each day of the recession, the challenges for the air transport industry are mounting," says IATA director general and CEO Giovanni Bisignani. "We are not out of the woods yet...freight remains at shockingly low levels. The worst may be over. However, we have not yet seen any signs that recovery is imminent."
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