Exporters See Near-Term Softness Across Asia; Stronger Growth Ahead - HSBC Data

Tom Burroughes

14 November 2012

Exporters in the Asian region expect conditions to soften in the near term but their longer term outlook is more upbeat, according to HSBC in a report shedding light on the economies across the Asia-Pacific region, now one of the fastest growing wealth management regions.

According to the HSBC Trade Confidence Index, confidence amongst Asian traders has dipped slightly to 111, down from 113 in the first half of 2012. Only 57 per cent of Asian traders expect the global economy to stay the same or grow (vs 66 per cent in the first half of 2012) and 79 per cent of them expect their trade volumes to grow or at least maintain the same level (vs 83 per cent in the first half of 2012).

Trade is, however, expected to pick up in 2013, with Asia powering the global economy, according to Noel Quinn, HSBC’s head of commercial banking for the Asia- Pacific region.

While not specifically about financial services or wealth management in particular, the data is suggestive of how, despite some short-term concerns, the Asia-Pacific region is seen as one of the global economic powerhouses.

“Trade prospects for all the Asian countries will depend crucially on what happens in China and to a lesser extent India. Our forecasts for these two countries show strong growth continuing after the current slow patch, supporting a global recovery,” Quinn said.

The HSBC Trade Forecast reveals that merchandising exports from all countries in Asia will remain robust, led by China, India, and Vietnam, which are all expected to post double-digit annual increases to 2020. Indonesia and Hong Kong are also expected to record double-digit growth in the period 2013-2015, before slowing to 7-8 per cent in 2016-2020.

Although Asian export growth is generally expected to be lower in 2016-2020 than in the near term, some countries will expect a pick-up, namely Malaysia, Bangladesh and Singapore.

Indian (+7), Australian (+6), and Chinese (+2) traders have registered increases in confidence levels over the coming six months. Decreased confidence levels over the short term have been driven by Singapore (-11), Indonesia (-6), Hong Kong (-6) and Vietnam (-5).

Asian traders still see Greater China as their most promising region for growth over the next six months followed by Southeast Asia and the US. Asian traders continued to cite fluctuating exchange rates as their biggest barrier to growth.