Brazilian air trade grew by 2% in 2022 and is now about 14% above 2019 levels. As with other air cargo markets around the world the first half of the year was strong while volumes declined in the second half of the year and particularly in November and December. This is in line with a drop in manufacturing activity in the last months of the year. Manufacturing activity is expected to recover in 2023. In the medium term Brazil could well benefit from a trend to dual sourcing.
Air Freight Market Performance
With a population of around 213 million Brazil accounts for a little under half of total South American economic output and 20% more than the combined output of Argentina, Chile, Colombia, Peru and Ecuador.
International trade figures show about 600,000 tonnes of air freight, with imports slightly higher than exports. International freight accounts for about 40% of tonnes handled at Brazilian airports, with domestic freight and mail accounting for the balance. Geography and the size of the country mean a strong requirement for domestic airfreight. Almost two thirds of the country’s air cargo volume is handled through the two Sao Paolo airports – Viracopos-Campinas (VCP) and Guarulhos (GRU). Manaus (MAO), Rio (GIG) and Recife (REC) are the next biggest airports.
With a strong manufacturing base, air freight exports are less driven by perishables than other countries in South America. Overall airfreight imports and exports largely balanced, although there are differences on a market level. Intra South America air trade is more export driven, while trade with Asia is more import driven. Other markets generally exhibit strong air trade in both directions. Regional trade within the Americas outperformed trade with other continents/
The interactive dashboard below provides an overview of airfreight performance since January 2015 as well as the main commodity groups and trading partners. Use Ctrl + Left Mouse Click to select multiple items.
Air Trade Outlook
IMF forecasts export growth of 3.2% per year between 2022 and 2026 and moderate growth in imports of about 0.9%. Figure 1 provides an overview of historical and forecast performance for key economic variables. Increasing investment as a share of GDP, a drop in unemployment point to export driven growth.
A survey contacted in April 2022 by the Economist Intelligence Unit found that the majority of companies surveyed had implemented dual sourcing of raw materials for production. If dual sourcing and regionalisation of supply chains becomes a more pertinent issue, then this could benefit Brazilian manufacturing and airfreight. Figure 2 provides an overview of Brazil manufacturing PMI development since January 2020.
Brazilian manufacturing did take a hit particularly in November and December 2022, but is expected to recover in the 2nd quarter of 2023. This will be good news for airfreight.
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