The growing band of middle class consumer in Asia’s emerging markets will be the hottest markets for U.S. goods and services in the future, confirms a new forecast on global trading trends.
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India will be the fastest-growing market, with exports to the South Asian nation expanding at an annual rate of 12% between 2016 and 2020, and staying in the double digits beyond then. Vietnam is another strong future trading partner for the United States, with double-digit annualized trade growth forecast over the next five to 15 years. Other promising new markets in the future include Indonesia, Egypt, Turkey, Mexico and Poland.
And if the prospects for Europe look worrisome now, trade will soon begin to rebound, according to the HSBC Global Connections report. U.S. export growth to Europe is expected to recover to a pace of 6% per year during 2012 to 2020.
HSBC’s Global Connections report consists of two companion reports. The HSBC Trade Forecast, produced in association with Oxford Economics, examines longer-term global trade trends over the next five, 10 and 15 years. The HSBC Trade Confidence Index , conducted by TNS, looks at trade trends in the next six months.
In the shorter-term, the Trade Confidence Index finds US- importers and exporters are maintaining a steady confidence about their expected trade volumes. Nearly half (48%) of US importers and exporters foresee their trade volumes increasing.
While this is slightly weaker than the HSBC Index found six months ago, 65% of US businesses anticipate the global economy to remain at current levels or grow in the near future.
As our forecasts bear out, despite a difficult 2012, the global landscape is ripe with emerging markets on strong growth tracks,” said Prabhat Vira, HSBC’s Executive Vice President and Regional Head of Trade and Receivables Finance. “US businesses that are considering diversification will find themselves in an attractive position when looking at opportunities for solid international trade partnerships in regions like Brazil, India, Vietnam and Malaysia.”
Despite these promising new markets, China, along with traditional trading partners Canada and Latin America, remain the bread and butter for US importers and exporters. Canada is the No. 1 market with 84% of US traders doing business with the northern neighbor. Latin America is No. 2, with 74% of US businesses trading with the region. Greater China rounds out the top three with 73% of US traders doing business there.
Over the short-term, US businesses say the key obstacles to international trade are related to the costs of logistics, shipping, and storage.
For a copy of the HSBC Global Connections Trade Report, November 2012, please click here