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1
Global Trade Trends
Long Island Import Export Association, May 2011
Andrea Ratay, Senior Trade Sales Manager
2
Global Macro Trends
Emerging markets are growing faster than developed markets; however growth has slowed and is more balanced
Economic stabilization occurring Conference Board's Leading Economic Index, an indicator of U.S. economic health
rose in March for the ninth straight month U.S. Census Bureau announced retail sales rose 6.6% in 2010.
World trade grows faster than GDP Historically World Trade has grown at a faster pace than GDP World trade growth recovered to 14.5% in 2010 World trade is expected to grow 9.3% over the next ten years
*Source HSBC Emerging Markets Index Q2 2010
3
Neutral
Negative
Positive
111116 116
121 121 122 123 125132
140
114107
102 10410497 101
108115114
107 109
0
20
40
60
80
100
120
140
160
180
200
Malaysia HK Egypt UK France Australia Germany Poland Canada USA China Argentina Vietnam Brazil Singapore UAE Turkey Indonesia Mexico KSA India OverallGlobalIndex
1H111H11
Note: (1) The Overall Global Index is the unweighted average of the 21 markets listed above
Trade and the Global EconomyEmerging Markets Lead Global Trade Confidence
4
107110
108111
60
80
100
120
140
2H09 1H10 2H10 1H11
Neutral
Negative
Positive
U.S. Trade Confidence at its Highest Level since 2H 2009
5
14
48
33
40
11
45
35
6
14
4438
21 2
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses.
Source: Q1. How do you expect the volume of your import, export business to change in the next 6 months? Do you expect the volume of your import, export business to increase significantly, increase slightly, maintain the same level, decrease slightly or decrease significantly?
Decrease Significantly
Decrease Slightly
Maintain Same Level
Increase Slightly
Increase Significantly
Base: USA n=300
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
U.S. Businesses Expect Trade Volumes to Increase
6
5
54
2018
1 2
44
2724
3
57
25
13
1 2
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses.
Source: Q13. How do you expect the global economy, to change in the next 6 months? Do you expect the global economy to…?
Decline Significantly
Decline Slightly
Maintain Same Level
Grow Slightly
Grow Significantly
Base: USA n=300
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
U.S. Businesses Expect Global Economy to Grow
7
1
11
74
11
3 1
15
71
12
2
12
73
8
1 0
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
Concerns Persist over Risk of Buyers Defaulting on Payments
Decrease Significantly
Decrease Slightly
Maintain Same Level
Increase Slightly
Increase Significantly
Source: Q2A. How do you expect the risk of your buyers defaulting on payment to change in the next 6 months?
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses. , excluding pure importers (only import raw materials or semi-finished / finished goods; does not involve in any exports activities, not a commodity trading company, and not an import or export broker / wholesaler).
Base: USA n=265
8 , only those who answered ‘increase significantly’ or ‘increase slightly’ in Q2A
Source: Q2B. What strategies, if any do you intend to put in place over the coming 6 months to overcome non-payment risk from buyers? Multiple mentions.
%
Base: USA n=31
1H11(Change
from 2H10)
3 (-2)
3 (/)
3 (-13)
3 (/)
6 (-3)
10 (-4)
10 (+5)
10 (-13)
19 (+17)
23 (-2)
Suppliers Will Be More Selective about Buyers and Require Advance Payments to Mitigate Non Payment Risk
+Figures with less than 1% mentions are not shown.
Advance payment
Doing less business with particular buyers
Tighten payment terms / duration
Monitor debts / accounting items closely
Examine buyers' credibility / financial background
Export credit insurance (through your financial institutions)
Require cash payment
Limit loan / credit / amount
LC (Letter of Credit) / LC which is of shorter period
Collect debt by company itself or through hiring finance company
Notes:(/) Denotes result is not available as there was no mention in the previous wave.
9
3
14
77
40 1
12
80
61
11
79
51 1
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses.
Source: Q3A. How do you expect the risk of suppliers not honoring agreed trade arrangements to change in the next 6 months? Base: USA n=300
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
Risk of Suppliers Not Honoring Trade Arrangements Continues to Concern Buyers
Decrease significantly Decrease slightly Maintain same
Level Increase slightly Increase significantly
10
%
1H11(Change
from 2H10)
2 (-9)
6 (/)
8 (0)
10 (+2)
20 (+4)
22 (+8)
24 (+5)
24 (0)
Base: USA n=51
Buyers Cite Increases in Costs and Global Economy As Potential Reasons for Suppliers Not Honoring Trade Agreements
+Figures with less than 1% mentions are not shown.
Source: Q3B. Why do you expect the risks of suppliers not honoring agreed trade arrangements to increase significantly / increase slightly? Multiple mentions. , only those who answered ‘increase significantly’ or ‘increase slightly’ in Q3A.
Notes:(/) Denotes result is not available as there was no mention in the previous wave.
Increase in cost
Global economy contracts, business becomes unstable
Financial health of your suppliers is likely to deteriorate
Availability of raw materials declines
Fluctuation in cost
Logistical and transportation capabilities are insufficient
Unwilling to accept flexible payment arrangements such as credit or payment terms
Less business / orders
11
3
27
65
21 2
25
67
52
21
69
41 1
Decrease Significantly
Decrease Slightly
Maintain Same Level
Increase Slightly
Increase Significantly
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses.
Source: Q5A. In the next six months, how do you expect your capacity to access trade finance to change? Base: USA n=300
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
U.S. Businesses Expect Trade Finance Access to Improve
12
2
24
3236
2 1
25
45
28
0
28
35
26
3 1
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses.
Source: Q7. How would you expect exchange rates to impact your import, export business in the next 6 months?
Very Unfavourable Unfavourable Neither Favourable nor unfavourable Favourable Very Favourable
Base: USA n=300
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
Exchange Rates Seen as Unfavorable and as a Major Barrier to Trade Growth
13
Very Unfavourable Unfavourable Neither Favourable nor unfavourable Favourable Very Favourable
1
18
57
20
1 0
13
60
23
2
17
53
20
3 3
Note: Figures may not add up to 100% due to rounding and the exclusion of “Don’t know / Refused” responses.
Source: Q8. How would you expect government trade regulation to impact your import, export business in the next 6 months?Base: USA n=300
1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11 1H10 2H10 1H11%
Government Trade Regulations Being Viewed More Positively
14
%1H11
(Change from 2H10)
Greater China
Latin America
Canada
Southeast Asia
Rest of Asia
Western Europe (excl UK)
Middle East
UK
Australia / New Zealand
Sub-Saharan Africa
Central / Eastern Europe (excl Germany)
Germany
Others
Don't Know / Refused
1 (0)
3 (+2)
3 (/)
27 (+2)
25 (-5)
9 (-6)
8 (+1)
6 (+2)
5 (+2)
4 (-1)
3 (-1)
3 (+1)
2 (+1)
2 (-1)
Greater China and Latin America Represent Greatest Opportunities for Future Trade Growth
Base: USA n=300 Source: Q9. Over the next six months, which of these regions do you see as having the best opportunity for your business growth?
Notes:Greater China includes Hong Kong SAR, Mainland China, Taiwan, Macau(/) Denotes result is not available as there was no mention in the previous wave.
15
Summary
U.S. businesses demonstrated their highest level of confidence to date for the Trade Confidence Index
Expectations for growth are tempered by concerns related to rising costs of doing business, fluctuations in foreign exchange rates, narrower margins and volatile demand.
Suppliers are becoming increasingly selective about the buyers they do business with as a way to mitigate risk
China and Latin America are the two biggest growth opportunities for U.S. companies while Canada’s importance is declining
Government trade regulation seen as more favorable versus previous TCI reports
Intra-regional trade continues to underpin global trade activity with emerging markets playing a key role in all facets of future global trade growth
16
Disclaimer
16 |
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