Dubai: The UAE has scored the highest in the HSBC Trade Confidence Index (TCI) with the near-term trade prospects of the country viewed as very favourable based on a survey of 5,800 exporters, importers and traders from small and mid-market enterprises.
The HSBC Trade Confidence Index survey is conducted in 23 markets and is the largest trade confidence survey globally. It takes the views on trade volumes, risk to suppliers, need and access to trade finance, impact of exchange rates and regulation.
Confidence among businesses in the UAE on the short-term outlook for trade has reached an all-time high since 2009 — jumping nine points to 141, according to the latest HSBC Trade Confidence Index.
An overwhelming 83 per cent of respondents expect trade volumes to increase over the next six months, of which 49 per cent expect a significant pick-up in trade.
In terms of the most important trade corridors over the next six months, Asia was again tipped by survey respondents as the region presenting the most opportunities for business growth. The proportion of respondents singling out Asia as the key growth region rose to 51 per cent in 2013 in the second half, up from 39 per cent six months prior. Meanwhile, optimism about trade prospects with neighbours in the Mena region faded somewhat over the same time horizon.
Most promising trade corridor
“We know that UAE-based businesses view Asia as their most promising trade corridor over the short term, but it doesn’t come as a surprise that the rest of the Middle East, Europe and North America are also listed in their trading corridors of choice,” said Nicholas Levitt, head of commercial banking for HSBC Bank Middle East Limited, UAE.
The forecast notes that in the long term, India and China will be the UAE’s fastest growing trade routes until 2030 — growing at 10 per cent per annum. Turkey and Saudi Arabia will also become increasingly important sources of demand.
With the shale revolution in America weighing on extra oil demand potential for the UAE in the medium term, non-oil sectors are expected to become more important drivers of growth.
“While oil and demand supply will continue to be crucial in determining the UAE’s trade position, we also expect to see infrastructure and construction, tourism, retail and government investment in technology to be the main drivers for UAE. Dubai’s successful bid to host Expo 2020 will also have a key role to play in this as the event catapults the country into the centre of the global stage,” said Levitt.
Trade prospects are looking very positive for the UAE in both the short and long term, especially given the geographic diversity of its trade base and its progress in diversifying away from the oil sector.
