Date: Wednesday, December 7, 2022
Strong consumer spending could help the US dodge a recession in the coming year, the head of the biggest West Coast US port said.
“The consumer continues to buy,” Port of Los Angeles Executive Director Gene Seroka told Tom Keene, Jonathan Ferro and Lisa Abramowicz on Bloomberg Television Tuesday. “The last four months of consumer-spend numbers are more encouraging than many thought coming into the holidays — Black Friday, Cyber Monday.”
Seroka, who’s not expecting a recession next year, added that a large share of cargo “coming through our port are parts and components for US manufacturers,” which indicates parts of the local industry are also upbeat about the economy.
Together with the neighboring port of Long Beach, Los Angeles handles about 40% of all the nation’s containerized trade with Asia.
Still, the Southern California complex is starting to see volumes slow as some consumers shift their spending from goods to services and others tighten their belts amid an uncertain economic outlook. On top of that, widespread logjams last year and uncertainty around ongoing labor talks involving 22,000 dockworkers has led shippers to increasingly divert cargo to the East Coast.
Cargo volumes at the port have been falling in recent months, dropping 25% in October from a year earlier and reaching the lowest level since mid-2020. Despite the slowdown, Seroka is projecting 2022 as the port’s second-busiest year yet.
“It’s going to give us a chance in our industry as maybe one of those leading indicators to flush out some of the older inventory and get back on maybe a more normal cadence” at the start of 2023, Seroka said.