Global trade trends: the winners, the risers and the surprises

Last edited: 16 March 2016

In its second international trade study, the Castrol Global Trade Barometer (CGTB) reveals the strongest-performing and fastest-growing trading nations across a range of industries. Here are five findings from the latest report of all that is ‘mined, made and moved’

1. Asia firmly anchored… but watch out for the buffalo

Fourteen of the world’s 20 largest ports (by value) are in Asia and nine of those are in China, according to the barometer. One growing port that has emerged elsewhere is Dubai. It has reached ninth position through its commitment to innovation and billions of dollars being poured into its infrastructure, enabling the shipment of $350.62 billion of goods in 2014.

In Europe, heavy traffic, congestion and, ironically, ongoing work to improve terminal throughput, saw Rotterdam, the region’s busiest port, drop out of the top 10 into 11th place. The Dutch hub handled an impressive $304.60 billion-worth of goods in 2014, but only a third of that handled by number one, Shanghai. At more remote ports, it’s all about innovative thinking; if Australia’s Northern Territory Government gets a trade in buffalo up and running with Vietnam, some of the region’s 100,000 feral buffalo will be on the move.

The port superpowers: top ten ports by value ($bn)

“Ports reflect the overall story of global exports and imports,” says Mandhir Singh, chief operating officer, Lubricants. “However, not every nation will benefit equally from the rising tide of trade. Winning the port race depends on geographic advantage, and remaining at the forefront of innovation and development.”

2. Trading up and fast: Iraq, Vietnamese computers and cough remedies

Heading the list of fastest-growing trading nations is Iraq, with compound annual growth rate (CAGR) between 2014 and 2019 forecast at 9.79%. Iraq is also the world’s second fastest-growing exporter and importer, but the Middle Eastern nation is pipped to the post as a growing importer by Vietnam. 

Vietnam has been able to ‘piggyback’ very successfully on the growth of China, its much larger neighbour, and is helped also by strong partnerships with other neighbouring countries and the rise of its middle classes. Vietnam’s growing computer exports, worth $1.68 billion in 2014, are the world’s fastest-growing export product market. As well as technology, Vietnam is becoming known for its pharmaceuticals and a lot of both sectors’ growth results from the use of Vietnam as a production base by Chinese companies. 

“Vietnam is fast becoming Asia’s great success story, performing particularly strongly owing to its geographic location and relationship with China,” says Singh. “Vietnam also benefits from outsourcing, which explains its continuation as the third fastest-growing export nation. Around a third of the Vietnamese population now lives in cities; this rapid urbanisation and a youthful workforce should provide an increasingly skilled workforce to help the country develop its foothold in global information communications technology.”

3. The Seychelles: dream honeymoon destination, or the next big thing in aerospace?

Usually associated with endless beaches of fine white sand and ‘getaway-from-it-all’ holidays, the Seychelles is a rising force in global aerospace. Admittedly dwarfed by the US and its $116.75 billion of aerospace exports in 2014, the Seychelles is ‘only’ the 10th largest aerospace exporter in the world. However, the $3.14 billion-worth this group of Indian Ocean islands shipped out in 2014 was well supported by a growing science and technology capability and its proximity to India and China. 

Unsurprisingly, global aerospace trade patterns closely follow those of the US, the sector’s biggest player by miles. The US has experienced a net decline recently, but investment is expected to pick up in 2017 and 2018, faster than was previously thought.

“There won’t be blue skies for many nations [in aerospace], as the growth lag looks set to continue for the time being,” continues Singh.

Exporting success: top ten aerospace exporters by 2014 value ($bn)

“However, since our last Aerospace Trade Barometer, forecast growth is predicted to more than double from 2% to 4.3% to 2019. Countries close to Germany and China are benefiting from their continued investment in the aerospace sector, and the barometer predicts significant accelerations in growth for countries such as Hungary, Vietnam and the Seychelles.”

4. Ship shape: a niche trade for North Africa

North Africa barely features in the CGTB study, but one of the region’s nations, Algeria, has become the fastest-growing trader of ship components, despite never having appeared in the top 10 rankings before. In close proximity to Europe, Algeria is enjoying a boom in trade owing to heavy investment in its ports’ capacity in recent years, as well as increased development in its wider infrastructure and in skills. Its location close to the EU, diplomatic ties with China and growing energy trade have also contributed. 

Good news for Algeria, but, overall, shipbuilding has suffered a bit of a downturn. By its nature, the industry is often one step behind the world economy due to the long lead times required to build the vessels. This leads to an ‘order-to-delivery’ lag as companies don’t pay for the ship until it is delivered.

“About 90% of the world’s goods are transported by ships, as opposed to land or air,” concludes Singh. “Despite this, the industry is still struggling as it experiences the effects of over-supply and excess capacity created in a rush to build ships pre-recession. Europe has really suffered in the forecast and over-ordering seems to be an issue for Germany, Italy and the UK.”

5. Mexico revs up to compete with the automotive giants

Mexico has switched its automotive industry up a gear to become the world’s sixth largest automotive trading nation, up from ninth in 2013. The value of its 2014 automotive trade approaches that of France, putting it comfortably ahead of the UK, South Korea and Italy. When it comes to automotive exports, Mexico’s exports of $79.13 billion put it only behind the ‘big three’, Germany, the US and Japan. Investments by companies such as Honda, Mazda and Nissan have boosted Mexican automotive output, while its free trade agreements with 44 countries have helped to make it an important export base for car manufacturers from Europe, China, Japan and the US. 

The automotive power list: top ten automotive trading nations by 2014 value ($bn)

“The rise of Mexico as a leading automotive trader is down to its strategic position within the Latin American regional supply chain,” says Singh. “By supplying established economies and tapping into regional supply chains, Mexico and other emerging nations are raising their own status as automotive manufacturing hubs.” 

By contrast, and with the exception of Germany, Europe’s automotive fortunes are shifting, with Italy, the UK and France all dropping down the top 10 automotive products importers table and Belgium and Spain disappearing off it altogether.

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