HSBC Launches New Global Trade Forecast
World trade volumes will grow by 73% by 2025, predicts HSBC Trade Connections, a new quarterly global forecast launched at HSBC’s Trade Summit in Hamburg. The report predicts that despite the current economic climate and a partner survey of international traders showing a downturn in confidence in the short term, trade will grow by 2% year-on-year until 2015. This is a volume increase of approximately 8% with international trade activity growing, on average, by just under US$1trillion a year between now and 2015.
Companies are being urged to find the right support to capitalise on the opportunities presented by expansion in growing and developing markets, and to mitigate the short-term risks of doing business during the next five years, by the leading bank for international business. HSBC Trade Connections is a comprehensive exploration of the future opportunities for businesses operating internationally, combining trade data from around the world with lead indicators of world trade and macro-economic trend information.
The HSBC Trade Confidence Index finds that despite a dip in global trade confidence, the majority of respondents (84%) anticipate either an increase in international trade, or consistent levels of international business activity, over the next six months. Businesses in Indonesia, Saudi Arabia, Egypt and the United Arab Emirates (UAE) are particularly optimistic about the immediate future, showing a positive uplift in confidence on the first half of 2011.
Alan Keir, group managing director and global head, HSBC Commercial Banking, said: “Recent events have left business people feeling uncertain but one thing is clear, for businesses that are looking to grow, international trade is the real opportunity. We commissioned HSBC Trade Connections to help our customers to shape future strategy based on valuable, meaningful insight. What the findings tell us – that international trade is set to grow despite current economic uncertainty – is reflected in what our customers are seeing and doing every day. During 2011, the international business we are supporting has grown as we use our presence around the world to support forward-thinking companies’ growth.”
HSBC Trade Connections predicts that Egypt, India, Vietnam, Indonesia, China and Brazil will be the international powerhouses that drive world trade growth in this period. Egypt is predicted to experience the fastest growth in international trade values – albeit from a low base – of 185% by 2025. This is being driven partly by the country’s redevelopment following the Arab Spring of 2011 but also because other countries around the world are seeing it as a gateway to the Middle East. China’s bounce-back from the 2009 collapse in world trade was phenomenal and as a nation, China rose from accounting for 8.4% of world trade in 2009 to 10.9% of world trade in 2010. The forecast predicts China’s share of world trade will reach 13% by 2025 overtaking the US as the top trading nation, driven both by commodities trading and by an increase in manufacturing in China.
As the centre of international business shifts from developed to emerging markets, HSBC Trade Connections finds today’s biggest developed trading nations are adapting how they do business to maintain their competitive advantage. This shift is creating a redistribution of the global supply chain, particularly prevalent in Europe and North America, as well as Japan. It finds German companies, for example, are increasingly working with businesses in emerging Europe (Poland and the Czech Republic) to create strong and integrated European-based supply chains. It predicts that while Germany’s share of world trade may fall from 8.2% to 7.2% by 2025, these innovative approaches will help it increase total trade volumes over the period from US$2.2 trillion in 2010 to US$3.5.1 trillion in the same period.
Keir said: “Companies wishing to take advantage of the opportunities international markets offer must have the right strategic partners in place to be successful. We are working with businesses around the world ensuring they are in the best shape for international trade, supporting them at every stage of the supply chain to provide end-to-end financial support that benefits both the business and their suppliers. We are committing to facilitate $750billion of world trade by 2013, working with international businesses to open up new markets and trade opportunities, by innovating how they are financing trade.”
The report also outlines: