Los Angeles-area seaports continued to process record numbers of shipping containers in June. Combined with the increase in intermodal rail freight, that’s a sign that the North American supply chain is up and running in support of an economic recovery, albeit with room to improve as global supply chain constraints unwind.
The increases signal growing confidence in a robust U.S. recovery.
The increases in seaport activity and the nationwide distribution of goods signal growing confidence in a robust U.S. recovery. We anticipate that consumers will continue to spend, pushing real gross domestic product growth to 7% for the year.
There are potential roadblocks, of course. The spread of the Delta variant among our trading partners — and now domestically — threatens the progress already made toward resumption of normal consumer behavior.
And the ratio of imports to exports at the Los Angeles ports makes it clear that the U.S. external sector is becoming increasingly one-sided.
The number of import containers processed at the Los Angeles ports in May and June were a record four times greater than the number of export containers.
In the past two decades, the ratio of import containers to export containers grew from 2.0 to 2.5 before the pandemic and has been rapidly climbing above 3.0 since June of last year.
On the plus side, that implies that U.S. demand for goods is likely to lead the global economy out of recession. But on the negative side, and unless the spread of vaccines outruns the spread of the variants, the lag in foreign demand will become a drag on U.S. growth.
On a larger scale, it draws attention to policy responses to changes in demand for U.S. goods and the competitive advantages of our trading partners.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
