Changi’s air freight volumes under threat as electronics exports lose spark

Can pharma pick up the slack?

Air freight volumes at Singapore’s Changi International Airport are expected to grow at a snail’s pace in coming years, on back of flagging shipments of electronics products and weak economic growth in its key export markets.

According to BMI Research, air freight volumes will grow at an average rate of 1.1% year-on-year from 2015 until 2019, well below the 2.6% average growth annual growth averaged over the five years to 2014.

Although the slow growth can be partly attributed to statistical base effects, air freight will also be affected by Singapore’s shrinking electronics manufacturing sector.

However, the drag from electronics will be offset by higher volumes in the pharmaceuticals industry, as well as strong domestic demand and transhipment services.

“Growth in air freight volumes at Changi International Airport will be sluggish at best over the next five years. Although our forecasts are for fairly slow growth in volumes over the coming years, this belies the fairly positive fundamentals behind the growth, especially when compared to recent years,” BMI Research said.