As emerging markets such as Peru, Turkey and Brazil get richer and transition from exporters of raw commodities to consumers of computers, cars, medical equipment and other upmarket goods, U.S. companies with a foot in those markets will see strong growth for the next decade and beyond.
U.S. exporters are charting growth ahead
Photo: Digital Vision
Even China will import more American goods then it ships to the U.S. within the next five years, according to a new trade study by HSBC Commercial Banking. The Global Connections Trade Report forecasts a 96% increase in U.S. trade activity by 2026, with an annual growth rate for U.S. traders of 4.6% in the period.
HSBC’s global trade forecast, produced with Delta Economics, examines world-wide trade trends during the next five, 10 and 15 years. Overall, despite the ongoing economic turbulence, global trade is forecast to grow at a robust rate of 4.7% annually over the next 15 years.
“Traditional export-driven economies in ‘emerging’ markets are becoming more consumer-driven and importing more from high-end developed nation producers like the United States to fulfill demand,” said Steve Bottomley, Head of Commercial Banking, HSBC, North America. “U.S. businesses should not ignore this important shift and growth driver, but instead position themselves to become beneficiaries of this opportunity that is expected to help fuel global trade for many years to come.”
The reversal of trade roles – with American-made products in demand by developing markets – provides a much-needed boost for U.S. companies still trying to shake off the global downturn. HSBC’s Trade Confidence Index, a separate study done twice a year, finds that U.S. exporters and importers are more confident about trade volumes over the next six months, with 59% of them anticipating an overall increase in trade volumes. That’s up 10% from the last survey in October 2011. U.S. businesses are also more optimistic about the state of the global economy with 44% expecting it to improve by year end, up from only 29% that held that same view in the second half of 2011.
Although traditional trading partners and closest neighbors Canada and Mexico remain the top two markets for U.S. goods, HSBC’s trade report identifies some new up-and-coming markets for American exporters. In next five years, the fastest growth markets for U.S. exports are Peru, expected to rise 8.7%, followed by Turkey and Brazil, both of which are expected to see growth of better than 8%. India is next on the list, with growth forecast at 7.6%.
China remains a key market for U.S. companies – the third largest – with exports expected to rise by 7% in the next five years and imports increasing close to 4%. China is the strongest of the top three trading partners; growth in trade with Canada is expected to be relatively flat during the next five years, with exports up just 1.7%, while exports to Mexico are forecast to grow close to 4% over the same period.
In terms of product categories, biopharmaceuticals and telecommunications equipment will be the two fastest growing non-commodity U.S. exports over the next five years, forecast to grow 8.6% and 6.7% annually. In commodities, soya beans, coal and petroleum all show significant growth during the next five years, above 9%. Other in-demand American products include aircraft parts, and printing and related machinery (coloring fabrics, books, magazines, transport vehicles, containers, packaging) destined for the Asia Pacific region.
Asia and Latin American are hot markets for medicines, expected to rise by 7% in the next five years, while Latin American imports of biopharmaceuticals will grow by more than 11%. Key growth markets for U.S. autos are Brazil, expected to increase car imports by more than 13% in the next five years, and China, with auto imports expected to rise by nearly 12% in the same period.
Another notable finding in HSBC’s trade report is the fact that China and Germany will leapfrog the United States to become the world’s largest importers by 2026.