(Bloomberg) — AP Moeller-Maersk A/S (CSE:), the world’s biggest container-shipping company, signaled it’s less optimistic about growth in its industry as trade wars dent the economic outlook.
Copenhagen-based Maersk now sees global growth this year of 1-2% compared with a previous estimate of 1-3%, it said on Friday. The company said growth in its own business may be “slightly lower” than the industry average.
The more pessimistic outlook “reflects the broad-based weakening of the economic environment in all the main economies,” Chief Executive Officer Soren Skou said in the statement. “Negative effects from escalating trade restrictions also weighed on trade growth.”
Amid protracted tensions between the U.S. and China, Maersk said it’s bracing for a “continued slowing in global manufacturing and global export orders.” The company is projecting industry growth of 1-3% for 2020, but said that the “continued weakening of global sentiment, above all in the manufacturing sector, reduces the likelihood of a growth pick-up” next year.
Maersk raised its full-year profit forecast on Oct. 21. The company said back then that its container-line business had performed better than expected despite weak global trade growth fanned by tensions between U.S. President Donald Trump and China. On Friday, the company said it still sees full-year operating profit, or Ebitda, of about $5.4 billion to $5.8 billion.
“Aside from the cyclical slowing of the global economy, the main risks to global container demand relates to the U.S.-China trade negotiations. Other risks to the outlook relate to the effectiveness of fiscal and monetary stimuli in major economies, such as the U.S. and China,” Maersk said. “Finally, the outcome of the Brexit negotiations poses a risk to UK and European container trade.”
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