U.S. Optimistic for Short-Term Trade Prospects, Says HSBC Report
Trade volumes over the next six months in and out of the U.S. are expected to grow as economic conditions improve and global demand increases, said HSBC in a trade forecast report. HSBC's Trade Confidence Index went up a point compared to six months ago, to the highest level in the survey's five year history, the company said. Technology imports are expected to dominate in the U.S. and continued investment in research and development (R&D) will be important for the U.S. to maintain it place as a top technology exporter, the report said.
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By industry, wholesale/retail and manufacturing companies are most optimistic with stronger trade flows expected by 75 percent of respondents in the wholesale/retail sector and almost 70% in the manufacturing sector, the report said. The survey is made up of six-month views of 5,550 -- around 250 in the U.S. -- exporters, importers and traders from small and mid-market enterprises on: trade volume, buyer and supplier risks, the need for trade finance, access to trade finance and the impact of foreign exchange on their businesses.
The U.S. is expected to "to import high volumes of Information Communication Technology (ICT) goods to renew and replace existing stocks" and "importers of technology goods stand to benefit from R&D growth and innovation in other developed economies, but also in emerging markets where R&D spending is growing rapidly," the report said. “As an owner of the intellectual property of high value goods, the U.S. and other developed economies currently dominate the global technology export market, but under-investment in R&D over the long term can pose a competitive threat,” said Prabhat Vira, regional head of Global Trade and Receivables Finance in North America for HSBC in a press release (here). “The world economy is becoming more knowledge-intensive and for the U.S. to retain its lead, it’s crucial that businesses continue to invest in research and innovation.” Industrial machinery and transport equipment are also expected to dominate U.S. imports, said HSBC.
Meanwhile, "the leading role of the US as an exporter of high-tech goods will come under pressure in the years ahead," it said. The U.S. ranks third in technology exports among the 25 countries included in the report. "At a sector level, industrial machinery should remain a key driver of US exports, with US manufacturers retaining their global lead in this highly competitive sector through continued technological innovation. Other key drivers of export growth will be transport equipment and scientific apparatus." Due to slowed growth outlooks in Canada and Europe, exporters are looking toward faster growing destination markets among developing economies, said the report. "In that regard, China and Brazil are expected to prove particularly significant as export destinations by 2030," it said. Some fifty-five percent of respondents pointed to "the cost of essential services (shipping, logistics and storage) as being the most significant barrier to trade," it said.