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FedEx trims its view on 2013 global growth, US view unchanged
Package delivery company FedEx Corp cut its forecast for global growth in 2013 for the second time this year, citing slower growth in China, recession in some European economies and high energy prices.“We are operating in the most tepid post-recession recovery in the modern era,” David Bronczek, chief executive of FedEx’s Express unit, told a biannual analyst and investor meeting in Memphis, Tennessee.
FedEx said it now expects global gross domestic product to grow by 2.6 percent in 2013. That is down 0.1 percentage point from the company’s September forecast, which had already marked a 0.3 point reduction from the company’s forecast earlier in the year
The outlook for 2013 represents a slight rise from FedEx’s outlook for 2.3 percent growth this year.
Emerging markets, especially in Asia, will show faster growth, the company said, and they remain bright spots for the world economy.
FedEx, a barometer of economic activity because of the broad range of goods it moves, kept its estimate of 2013 U.S. growth unchanged at 1.9 percent. However, it said it now expects 2012 U.S. growth of 2.1 percent, a 0.1 point reduction from last month.
Positives for the U.S. economy include a recovering housing market, strong auto sales and stable financial markets. Uncertainties include post-election policies, the “fiscal cliff” that may mean deep budget cuts in the new year, and energy prices, company executives said.
FedEx plans to boost profits by $1.7 billion a year by the end of its 2016 fiscal year, partly by cutting costs at its Express unit. (Reuters)
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