Cyprus' Transportation Sector Sees Strong 17.3% Growth, Led by Air Transport

Cyprus' transportation and storage sector has witnessed a substantial surge of 17.3% during the second quarter of 2023 in comparison to the same period the previous year, as outlined in a recent report by the state's statistical service. This surge is primarily attributed to a noteworthy upswing in air transport activities, a trend indicated by the most recent revised statistics from the service.

The Business Cycle Index for Transportation and Storage, with 2015 as the base year, surged to 154.4 units during Q2, marking a remarkable growth of 17.3% compared to the corresponding quarter of 2022. Additionally, the Business Cycle Index for the sector exhibited an even more substantial annual increase of 22.3% for the January to June 2023 period.

Across all specific economic activities within the transportation and storage sector, there were noteworthy upticks when compared to the same quarter of the previous year. The combined growth rate of 16.9% was seen in air transport, storage, and supporting transport-related activities during Q2 2023. Postal and courier activities saw an increase of 12.5%, while land transport and road haulage experienced a growth of 7.9%. Even water transport observed growth, albeit more modest at 3.2%.

This data underscores the sector's resilience and adaptability, as it continues to expand despite complex economic conditions.

The International Air Transport Association (IATA) recently released data revealing the smallest year-on-year decrease in global air cargo demand since February 2022. IATA's Director General, Willie Walsh, expressed optimism that easing inflation in major economies could potentially stimulate greater economic activity through relaxed monetary policies.

Global demand, measured in cargo tonne-kilometers (CTKs), experienced a decline of 3.4% in June 2023 compared to June 2022 (-3.7% for international operations). However, the demand in June was only 2.4% below the levels observed in June 2019, prior to the pandemic.

On the capacity front, available cargo tonne-kilometers (ACTKs) increased by 9.7% in June 2023 compared to the same period in 2022.

During June, both the manufacturing output Purchasing Managers' Index (PMI) and the new export orders PMI remained below the pivotal threshold of 50, indicating a contraction in global manufacturing production and exports.

The gap between annual growth rates of air cargo and global goods trade narrowed to -2.6 percentage points in May, suggesting that air cargo's downturn was less pronounced compared to container cargo due to slowing global trade.

European airlines experienced a 2.8% reduction in cargo volumes during June 2023, an improvement from May's 6.6% decline. Concurrently, capacity in June 2023 saw a 4.4% increase compared to the previous year.

In the first half of 2023, cargo demand declined by 10.2% compared to the same period the previous year, while capacity for the same period experienced a rise of 2.5%, according to IATA's analysis.

By fLEXI tEAM