Businesses in Singapore (-16), followed by China (-14) and India (-11), showed the largest drops in confidence, revealing a less optimistic six-month outlook amongst importers and exporters in these markets.
The Index also revealed that 41 per cent of respondents in Asia expect the global economy to decline within six months, but the vast majority (83 per cent) anticipates either an increase in international trade volumes, or consistent levels of international business activity.
Despite a drop since H1 2011, Singapore’s traders are said to continue having a positive outlook and are looking to tighten payment terms, alongside limiting loans and credit amounts to ensure continuity of trade.
Singapore trade volumes are however predicted to grow by 110 per cent in the next 15 years – significantly higher than the world average of 73 per cent, according to HSBC Trade Connections world trade forecaster released on October 13.
The report also says Singapore will maintain its position as a core trading hub linking China, Hong Kong, Malaysia and Indonesia as well as the USA.
However, analysts say Singapore’s growth in trade could slow by 9.16 per cent over the next 12 months, largely due to its dependence on the consumer sector. This is not surprising, says HSBC, given 29.73 per cent growth in trade in 2010.
Elsewhere in the region, Asian trade volumes will grow 96 per cent to nearly US$14 trillion (S$18.1 trillion) by 2025 and will be the key driver of world trade growth.
India, Vietnam, Indonesia and mainland China are amongst the top five international powerhouses which will drive world trade growth until 2025. Trade in Asia is expected to grow by 4.8 per cent year-on-year until 2025 (vs. 3.8 per cent globally) and companies will have to grow in line with this rate in order to keep up with the pace of change.
Singapore’s top five trading partners are China, Malaysia, Indonesia, Hong Kong and the USA and trade with all of them is expected to grow in volume terms over the next 15 years. The report also predicts trade with India will also rise and although not in the top 10 while trade with Brazil will increase by 6.79 per cent.
Trade in commodities through Singapore continues to be a significant contributor with petroleum expected to grow by over 148 per cent over this period.
In terms of business trends, the report notes that Singapore remains a major shipping route connecting Asia and the Americas and this is reflected in its trading patterns. Electronics and computing as well as oil-based commodities are key features of Singapore's trade sectors and will grow in dominance over the next 15 years.
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