Press Room | HSBC
U.S. Businesses See Greatest Opportunities for Growth in Latin America and Greater China, HSBC Trade Confidence Index Reveals
28 September 2010
Optimism for Global Trade Growth Remains Steady
Access to trade finance expected to increase
Trade with Canada grows over the last 12 months
Although the outlook on the global economy has tempered over the past six months, U.S. small to mid-sized businesses remain optimistic about global trade growth. The latest HSBC Trade Confidence Index released today found that more than half (56 percent) of U.S. respondents anticipate higher trade volumes in the next six months -- only slightly less than the 58 percent of U.S. businesses that were optimistic about trade growth in the first half of 2010.
The HSBC Trade Confidence Index, the broadest international survey of small and mid-sized businesses engaged in cross-border trade, found that U.S. businesses were less optimistic about the global economy, with only 46 percent expecting economic growth over the next six months, compared to 60 percent in the first half of 2010.
“Considering some respondents’ concerns about the domestic economy, the positive sentiment among U.S. businesses about global trade prospects is encouraging and indicates that trade remains one of the key drivers of economic growth globally,” said Bill Nowicki, Executive Vice President and Head of Trade and Supply Chain North America at HSBC. “The emerging markets, and in particular Latin America and China, will provide future trade opportunities for U.S. businesses. Echoing intra-regional trade trends globally, trade between the U.S. and Canada continues to increase.”
Sentiment continues to be the highest among the emerging markets with India (140), United Arab Emirates (125), Indonesia and Mexico (both at 124) and Brazil and Vietnam (both 122), the most confident about their local economies' trade activity and growth. In the developed countries, U.S. businesses' confidence dropped slightly from 110 to 108 in the first half of 2010; however, overall developing markets are showing higher levels of confidence. All markets surveyed point toward a positive outlook, with the two lowest readings (106) in both Hong Kong and France.
Among the many key findings of the HSBC Trade Confidence Index is that U.S. businesses increasingly believe access to trade finance is improving. In fact, 25 percent of the respondents expect access to trade finance will increase slightly in the next six months; in the second half of 2009, only 16 percent made such a prediction. This indicates that companies believe that credit markets are continuing to open up as the economy stabilizes and improves.
Another significant finding is that emerging markets continue to present an enormous opportunity for U.S. exporters and importers as they lead the global economic recovery. In fact, the HSBC Trade Confidence Index revealed that:
- U.S. companies are gaining enthusiasm for trade with Latin America, which the respondents listed as the most promising region for trade growth in the next six months, followed by Greater China and Canada.
- Among the nations surveyed in the HSBC Index, Canada, China, Hong Kong, India and Mexico all included the U.S. among the top three most promising regions for trade growth in the next six months.
- The number of U.S. businesses that believe trade volumes will remain the same has decreased. In fact, compared to their outlook in the second half of 2009, more businesses are predicting that trade volumes will increase, though slightly.
“Global trade is a key barometer and driver of economic growth,” said Nowicki.
“Exporters and importers remain confident about trade prospects, albeit slightly less bullish than they were six months ago -- which indicates that growth in emerging markets has become more evenly paced while growth in established markets remains somewhat constrained.”
The trend for intra-regional trade between the U.S. and Canada continues to build. More than eight out of ten (86 percent) of U.S. businesses identified Canada as the nation with which they do the most trading. This is a significant increase since this time last year, only 65 percent of respondents identified Canada as their most frequent trade nation.
Nowicki said intra-regional trade and trade among emerging markets have become the lynchpin of global trade, establishing a new global trade paradigm. “To leverage the many trade growth opportunities that abound today for U.S. businesses, they should seek out insight from companies with a global footprint and deep experience on both sides of trade transactions,” said Nowicki.
Additionally findings from the HSBC Trade Confidence Index include:
- More companies are requiring payments in advance and are simultaneously offering less flexible payment terms for their products
- U.S. businesses remain cautious about risks associated with buyer defaults and supplier non-delivery, maintaining the same outlook they had in the first half of 2010.
- Banks are expected to play an increasingly important role in trade finance, with 40 percent of respondents (up five percent since the first half of 2010) expecting to leverage their banks to finance their trade needs.
- The dollar continues to be the dominant currency of choice for trade settlement, and respondents expect that trend will continue over the next six months.
Notes to editors:
Methodology and more details of the survey
The results are framed by respondents comprising of 5,124 exporters, importers and traders in 17 markets: Australia, Brazil, Canada, mainland China, France, Germany, Hong Kong, India, Indonesia, Malaysia, Mexico, Saudi Arabia, Singapore, Vietnam, UK, US and the United Arab Emirates. The data was compiled between July and September 2010. The results used to calculate an index range from 0 to 200, with 200 representing the highest confidence level, 0 represents the lowest and 100, neutral
Please see the attached report HSBC Trade Confidence Index - September 2010 for more information. The survey was conducted by research company TNS between July 19 and Sept. 1, 2010. In the U.S., the sample size included 300 small and mid-size businesses with annual turnover between US $20 million to $250 million.
HSBC Trade and Supply Chain
HSBC Trade and Supply Chain is one of the largest trade services organizations in the world. Our award-winning international trade expertise combines over 140 years of extensive experience in international trade with a unique blend of local knowledge, supported by advanced technology and our extensive network of dedicated trade services offices in over 60 countries and territories worldwide.
HSBC Bank USA, N.A.
HSBC Bank USA, National Association operates more than 470 bank branches throughout the United States. There are more than 375 in New York state as well as branches in Connecticut, Washington, D.C., Florida, New Jersey, Pennsylvania, Maryland, Virginia, California, Delaware, Illinois, 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 USA Inc. is one of the nation's largest bank holding companies by assets. HSBC Bank USA, N.A. is a member of the FDIC.
HSBC Bank USA, N.A., with total assets of $186 billion as of 30 June 2010, serves its 3.8 million customers through its personal financial services, commercial banking, private banking, asset management, and global banking and markets segments.
HSBC Global Banking and Markets is an emerging markets-led and financing-focused business that provides tailored financial solutions to major government, corporate and institutional clients worldwide. HSBC Global Banking and Markets in the United States offers a full range of tailored financial products through HSBC Bank USA, N.A. and HSBC Securities (USA) Inc.
HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 8,000 offices in 87 countries and territories in Europe, the Asia-Pacific region, North America, Latin America and the Middle East. With assets of US$2,418 billion at 30 June 2010, HSBC is one of the world’s largest banking and financial services organizations. HSBC is marketed worldwide as “the world’s local bank.”
- Juanita Gutierrez
- About HSBC
- Terms & Conditions
- Site Map
- HSBC Accessibility
- HSBC Group
- © HSBC Bank USA, N.A. 2014. All Rights Reserved.
Equal Housing Lender.
|†† Investments, Annuity and Insurance Products:|
|ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES||ARE NOT FDIC INSURED||ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY||ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES||MAY LOSE VALUE|