June 26, 2012 11:30 ET

Growing Emerging Market Demand for Products and Services to Drive UK Economic Growth

- UK to increase international business activity by 66% by 2026

- Import demand from emerging markets offer opportunities for UK businesses

- UK's fastest growing export markets will be Brazil, Canada, China and India

- 93% of UK businesses positive about the outlook for international trade volumes with trader confidence at 105 on trade confidence index overall

LONDON, UNITED KINGDOM--(Marketwire - June 26, 2012) - By 2026 the UK is set to increase its international business activity by 66%, which is an increase on the previous quarter estimates and positive news for the overall long term economic outlook.

The latest Global Connections trade forecast from HSBC Commercial Banking predicts that 'emerging markets' will experience a tipping point in the balance of trade power, where imports will grow faster than exports within the next five years. Indeed, this pattern is being highlighted in Brazil, China and India, where the trend is set to continue to 2026. For the UK, exports are expected to exceed imports as businesses make the most of the opportunities created by the subsequent increase in demand for goods and services from emerging markets.

HSBC's latest Trade Confidence Index also supports this prediction with 93% of UK businesses interviewed feeling positive about the outlook for international trade volumes over the next 6 months. Trader confidence is at 105 on trade confidence index overall. This shows a slight improvement from 2011.

Steve Box, HSBC Head of Trade and Receivables Finance, Europe commented:

"Taking advantage of overseas opportunities can offer businesses significant prospects for growth. We are seeing an increasing number of our customers looking to trade outside of the UK's traditional trade partners in Europe; this is reflected in the emerging trade corridors highlighted in this report. UK trade is predicted to grow faster than previously suggested and certain sectors are likely to thrive with increased overseas demand, particularly from a skills and specialism perspective. As a truly international bank, HSBC is ideally placed to support businesses that are looking to take advantage of global trade opportunities. Through our £4 billion International SME fund we will continue to support UK SMEs trading or aspiring to trade internationally and our ambition is to finance more forward thinking businesses than ever before."

The data also reveals that growth is likely to be greatest in sectors which correlate closely with economic development. Automotives, Non-Crude Oil, Medicines and Printing are the sectors which the research predicts will dominate world trade over the next 15 years with emerging countries leading the growth.

  • Brazil is expected to see car imports rise more than 13% over the next five years, with exports up 4.9% by 2016
  • Chinese imports of cars are expected to rise by nearly 12% by 2016
  • Asian and Latin American imports of medicines are expected to rise by 7% and Latin American imports of biopharmaceuticals by more than 11% to 2016
  • UK's fastest growing export sectors are Biopharma, Auto Engines, Petroleum Gases and Telephony equipment. This meets the demand from the emerging markets.

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Notes to Editors:

About Global Connections

Notes on the data:

The forecast predictions in this document have been provided by Delta Economics, and should not to be construed as HSBC advice or guidance. The research was commissioned by HSBC as part of a marketing campaign for HSBC Commercial Banking. The findings are based on Delta Economics' Interpretation of data which has been sourced from publicly available sources.

This forecast predicts how trade is going to develop over the next five, 10 and 15 years, based on data compiled by Delta Economics, an independent research house. It forecasts overall trade growth (exports, imports and total trade) globally, in global regions, and individual countries. With data from over 200 countries, the report covers the top 50 sectors for exports and imports for 19 selected countries. The Forecast has a unique approach to understanding the drivers of trade from a business perspective, informed by: trade trends, macroeconomic and market influences trade, and business environment influences on trade (including regulation, demographics, access to capital and finance). This research has been commissioned by HSBC and undertaken by Delta Economics.

The economic and business narratives stem from a broader documentary search that includes material from National Statistical Offices, the World Bank and International Monetary Fund, economic blogs, the Economist Intelligence Unit, Bloomberg, the Financial Times and other professional and financial services news websites.

About Delta Economics:

Delta Economics is a leading research-led economics consultancy founded in 2006 by Dr Rebecca Harding, a trade economist. Delta specialises in economic growth and trade modelling/forecasting. It also has extensive expertise in quantitative and qualitative market research, market intelligence and thought leadership with a specialism in the entrepreneurial and small and medium sized business sector.

HSBC Global Trade Confidence Index

The Trade Confidence Index, a study of current sentiment amongst 5,800 international businesses, suggests the short-term outlook for the global economy is positive. Almost three quarters (71%) of respondents believe it will remain stable or grow in the next six months, with an Index score of 113, above the neutral score of 100.

HSBC Bank plc:

HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people. In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to medium businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc.

HSBC Holdings plc

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,200 offices in over 80 countries and territories in Europe, the Asia-Pacific region, North and Latin America, and the Middle East and North Africa. With assets of US$2,637bn at 31 March 2012, the HSBC Group is one of the world's largest banking and financial services organisations.

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