Global cargo demand registered another fall in May but the second half of the year should see improvements, says the International Air Transport Association (IATA).

Cargo tonne kilometres (CTK) fell 5.2% year-on-year with capacity measured in available CTK up 14.5%, primarily due to belly capacity returning as the passenger sector recovers, putting capacity 5.9% above May 2019.

Factors affecting demand include the global manufacturing Purchasing Managers Index (PMI) posting an annual contraction of 1.4% in new export orders and a decrease of 5.2% in the production PMI, suggesting cooling manufacturing demand.

The global goods trade decreased by 0.8% in April due to macroeconomic and supply chain issues, with trading conditions favouring maritime cargo, with demand for container shipping declining 0.2% compared to 6.3% for air cargo.

The global supplier delivery time PMI increased from 54.5 in May compared to the low of 35 in October, indicating shorter delivery times and relief for supply chains, but it is also a sign of weaker global goods trade demand.

Willie Walsh, Director General of IATA, says, “Trading conditions for air cargo continue to be challenging with a 5.2% fall in demand and several economic indicators pointing towards weakness. The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo.”

Asia Pacific airlines were down 3.3% due to weaker international demand and capacity was up 38.3% as passenger demand recovered.

North America was the weakest performer for the third consecutive month, down 8.1%, with the North America – Europe falling at double-digit rates again at 10.3%.

Europe saw an improvement, decreasing 6.7% compared to 7.7% in April due to reduced contractions on the Europe – Middle East and the intra-Europe lanes.

The Middle East was down 3.1%, an improvement on the 6.7% fall in April, with capacity increasing 15.6%.

Latin America was the only market which grew, up 3.6% compared to a 1.6% decline in April, and capacity increased by 14.7%.

Africa declined 2.4% with growth on routes to Asia slowing from 18.5% in April to 11% in May, possibly due to the impact of the conflict in Sudan.