International Air Transport Association (IATA) reported that international freight markets contracted by 0.8% in December versus December 2010, but increased by 1.5% from levels in November. The major air freight region, Asia/Pacific, had the strongest growth at 2.2% month-on-month. The Middle East market continues to experience strong traffic demand, and North America, despite contracting over the year, managed to expand 6.5% in December compared to November.

Freight markets have shown growth for two consecutive months, and December cargo traffic grew 1.7% compared to November. Business confidence measures, which act as a leading indicator for changes in cargo markets, entered expansion territory in December.

Business confidence indicators for China, France and Germany also show positive signs for manufacturing activity. Indicators of export orders showed strong growth in December. IATA estimates that these could all be signs of the freight downturn bottoming out, with potential for growth in the coming months. Nevertheless, risks from European financial and economic downturn remain a possibility and they could suppress any potential upward moment in cargo traffic.

“Cautious improving business confidence is good news. But 2012 is still going to be a tough year,” said Tony Tyler, IATA’s Director General and CEO.

Cargo load factors have shown significant decline since mid-2010, but strength in December traffic has resulted in a slight increase in load factors.