India will be the fastest-growing market for US exports in the future, with demand increasingly driven by the country’s emerging middle class, according to a new report released today by HSBC Commercial Banking. Exports to India are set to expand at an average rate of 12% a year between 2016 and 2020, and will grow at a rate close to 10% a year over the period of 2021 to 2030, HSBC also reported.
The HSBC Global Connections report includes the HSBC Trade Forecast, which examines global trade trends during the next 5, 10 and 15 years, also finds that US export growth to Europe is expected to recover to a pace of 6% per year during the period of 2012 to 2020.
The HSBC Trade Forecast, produced in association with Oxford Economics, examines bilateral trade corridors between 23 major trading nations and further reveals:
- India and China will be joined by emerging trading nations including Vietnam, Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in the next three years.
- By 2020, HSBC expects that forward-thinking companies worldwide will have developed multiple trade corridors and partnerships, created effective networked supply chains, and tightened efficiency in their operations as a result.
- Echoing the US findings, India represents the fastest growing import or export partner (or both) between 2013-15 or 2016-2020 for the 23 markets examined globally by HSBC.
- US exports will increasingly find their way to rapidly growing consumer markets in developing economies, as growth prospects for the industrialized nations remain subdued.
- Over the medium term, the value of US goods exports destined for the economies of Asia (excluding Japan) is forecast to rise at an average annual rate of 8% throughout the period 2021-2030.
- Vietnam is expected to record double digit annualized trade growth throughout the forecast period of 2012-30 and is expected to become an increasingly important source of US imports.
TCI Reveals Steady Confidence About Expected Trade Volumes Over Next Six Months
In the shorter-term, the companion HSBC Trade Confidence Index (TCI) conducted twice a year for HSBC by TNS, finds US-based importers and exporters are still maintaining a steady confidence about their expected trade volumes during the next six months. Nearly half (48%) of US importers and exporters foresee their trade volumes increasing. And while the outlook has weakened a little compared to six months ago, 65% of US businesses do anticipate the global economy to remain at current levels or grow in the near future.
In total, 86% say their trade business will either grow or hold at current levels over the next six months. According to 40% of those surveyed, any obstacles to growth are likely to be related to costs of shipping, logistics and storage. In another positive trend, US traders also say they have more confidence in the financial health of their business partners.
The top two trading partners for US businesses remain their closest neighbors – 84% of US businesses traded with Canada, and 74% of US businesses traded with Latin America. Greater China rounds out the top three with 73% of US traders doing business in the region. Close to a third (30%) of US importers and exporters think Latin America holds the greatest potential for trade growth in the coming months, while 22% believe China is the most promising region.
The vast majority (91%) of importers and exporters indicated their need for trade finance will likely stay the same or increase in the next six months, and 44% of all businesses surveyed said they would rely on their banks for funding.
“As our forecasts bear out, despite a difficult 2012, the global landscape is ripe with emerging markets on strong growth tracks,” Prabhat Vira, Executive Vice President and Regional Head of Trade and Receivables Finance, said. “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.”
For a copy of the global report and further information, visit:
Notes to editors:
About the HSBC Trade Forecast - Modeled by Oxford Economics
Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade for total exports/imports of goods, based on HSBC’s own analysis and forecasts of the world economy to generate a full bilateral set of trade flows for total imports and exports of goods.
Oxford Economics produces a global report for HSBC, plus regional reports and country specific reports on the following 23 countries: Hong Kong, China, Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA, Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi Arabia, and Egypt.
About the HSBC Trade Confidence Index
The HSBC Trade Confidence Index (TCI) is an international survey of small and mid-market businesses engaged in cross-border trade and the largest trade confidence survey globally. The TCI has been commission by HSBC and is conducted by TNS. The TCI is drawn from the viewpoints on trade of 5,800 exporters, importers and traders from small and mid-market enterprises globally. Views were gathered from April 10, 2012 through June 1, 2012 for the latest TCI, the seventh.
About HSBC Commercial Banking
HSBC Commercial Banking serves more than 3.5 million customers, from small enterprises to large multinationals, in over 60 developed and emerging markets around the world. Whether it is working capital, trade finance or payments and cash management solutions, we provide the tools and expertise that businesses need to thrive. With a heritage stretching back nearly 150 years, and a network covering three quarters of global commerce, we make HSBC the world’s leading trade and business bank.
For more information visit: www.hsbc.com/1/2/business-and-commercial
About HSBC Bank USA, N.A.
HSBC Bank USA, National Association, with total assets of $194 billion as of 30 June 2012 (US GAAP), serves 3.1 million customers through its personal financial services, commercial banking, private banking, asset management, and global banking and markets segments. It operates more than 300 bank branches throughout the United States. There are over 200 in New York state as well as branches in Connecticut, Washington, D.C., Florida, New Jersey, Pennsylvania, Maryland, Virginia, California, Delaware, Oregon and Washington State. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirect, wholly-owned subsidiary of HSBC North America Holdings Inc. HSBC Bank USA, N.A. is a member of the FDIC.
About HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,900 offices in over 80 countries and territories in Europe, the Asia-Pacific region, North and Latin America, and the Middle East and North Africa. With assets of US$2,652bn at 30 June 2012, the HSBC Group is one of the world’s largest banking and financial services organisations.