Exporters should look beyond India and China HSBC research shows
Companies in North Somerset and the wider region should look beyond the BRICs (Brazil, Russia, India and China) when developing their export propositions and also consider the rapidly growing Middle Eastern and North African economies, new HSBC research has shown.
Although BRIC countries remain amongst the fastest growing global economies and key destinations for the region’s exporters, HSBC’s latest Global Connections Trade Forecast says that exports to the Middle East and Africa are catching up.
The research suggests that UK exports to the Middle East and North Africa are set to rise by 9% a year between 2013 and 2015 and by 7% a year between 2016-2020, with Turkey and Egypt in particular driving growth.
Government statistics show that the Middle East and North Africa is the South West’s fourth largest export market, with £324 million worth of goods exported to the region during the first six months of 2012.
Nick Stork, HSBC Bristol and Bath Area Commercial Director, comments: “According to HSBC’s Trade Forecast, the powerhouses of India and China will be joined by emerging trading nations such as Turkey and Egypt, as well as Indonesia, Poland and Mexico, to record significant trade growth in the next three years. This presents significant opportunities for South West companies to target these regions, as well as the rapidly expanding the BRIC nations.
“This is being driven by growing and higher value exports from these markets to each other – and the world – as their economies industrialise, and a focus globally on emerging economies with large populations and rapidly growing middle-class consumer markets.”
Exports to Asia & Eastern Europe
The research also shows that UK exports to Asia (excluding Japan) are forecast to grow by close to 11% a year during 2013-15 and by 9% a year during 2016-20. India is expected to be the most dynamic trade route in the region throughout these two periods.
The economies of Eastern Europe also look good for UK businesses the research says, with UK exports to Poland expected to grow by over 7% a year during 2013-15.
Exports to the Eurozone should subsequently rebound as well, as the region’s economy stabilises. UK exports to Europe (excluding Russia) are forecast to rise by just over 5% a year over the five years to 2020, before stabilising at around 4% per year over the following decade.
USA to overtake German
The forecast also predicts that the USA will overtake Germany to become the most important market for UK exports by 2030.
This is largely a reflection of the brighter economic prospects in the USA. Although the share of UK exports destined for China is set to grow, this will not be sufficient to push it above fifth place in the UK league table of trading partners.