Retail import growth remains robust, on track for all-time high this summer

Retailers responded to customer demand by importing more goods in the first five months of 2017 through the nation’s major ports. The growth of imports remains robust, albeit below the double-digit gains reported earlier this year. Up until May there has been just one month (February) when imports were down year-over-year.

The National Retail Federation in conjunction with Hackett Associates released their monthly Global Port Tracker report Friday (June 9) indicating U.S. ports handled 1.61 million “Twenty-Foot Equivalent Units” (containers) in April, up 4.8% from March. The May estimate is 1.69 million containers, up about 4% from a year ago. June imports are expected to total 1.64 million containers up 4.1% from a year-ago. Global Port Tracer also predicts by August retail imports will be a record 1.74 million containers. The last time imports hit a record was in March 2015 at 1.73 million containers.

“Year-over-year comparisons are slowing down but that’s largely because we had some unusual numbers early this year and strong volume in the second half of last year,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Despite that, we’re expecting some of the largest import volumes we’ve ever seen.”

The back-to-school push, which begins at retail in late June, is just around the corner and economists are predicting a solid season from late summer into the holiday rush. The National Retail Federation has forecast 2017 retail sales, excluding automobiles, gasoline and restaurants, will grow between 3.7% and 4.2% from last year. The increase is attributed to healthy job reports and decent income growth. The trade group said cargo volume does not correlate directly with sales because it’s the containers that are counted, not the items inside. That said, it does provide a barometer that helps to measure retailers’ expectations, Gold said.

“Consumers are spending more, and these import numbers show that retailers expect that to continue for a significant period,” Gold said. “This is a clear sign that the economy has long-term momentum regardless of month-to-month fluctuations. Whether it’s merchandise for store shelves or parts for U.S. factories, imports play a vital role in American prosperity.”

Ben Hackett, founder of Hackett Associates, said while imports are flowing in from China there is a lower industrial output growth rate at factories in that country, which is likely due to trade with the Western Hemisphere. He said slower growth for China is more like 6% down from 10%.

“We can assume U.S. retail sales continue to hold up but nothing coming out of Washington suggests an impetus to growth,” Hackett added.

RETAIL IMPORT TRENDS
U.S. Retail Imports by containers
May
2017: 1.69 million
2016: 1.62 million
up 4.32%

April
2017: 1.61 million
2016: 1.44 million
up 11.8%

March
2017: 1.53 million
2016: 1.32 million
up 15.9%

February
2017: 1.43 million
2016: 1.54 million
down 7.14%

January
2017: 1.67 million
2016: 1.49 million
up 12.08%