Resilient Global Trade Volume Forecast
(9 February 2024 - Global) Export and import volumes are forecast to grow 8.5 percent and 5.8 percent in the next six months, respectively, according to a large study released by Citi.
Citi partnered with East & Partners to conduct primary, voice-of-the-corporate research on supply chain challenges, resiliency, and the future of supply chains for the world’s largest and most complex organisations.
As a summary, the key findings of the proprietary analysis include
- Resilient Global Trade Volume Forecast - The Top 100 revenue-ranked corporates in each of 28 markets across North America, Asia Pacific (APAC), Europe, Middle East, and Africa (EMEA) and Latin America (LatAm) predict strong export and import growth of 8.5 percent and 5.8 percent in the next six months, respectively. Led by North America and LatAm, this robust trade volume forecast compares favourably to the prior year analysis.
- Gauging Supply Chain Complexity - APAC stands apart from the rest of the world distinctly in the area of supply chain "complexity". Corporates are adapting quickly to a prolonged period of consolidation and risk management, reflected in a greater receptiveness to reducing the number of supply chain partners in their network in response to margin compression, funding issues and reshoring suppliers in new trade corridors.
- Trade Corridor Realignment Quantified - Globally, almost one in three enterprises are implementing a “China Plus One” strategy while a further one in four are planning to. Which markets are the main beneficiary? Vietnam, Thailand, and Other Southeast Asian countries.
- Real Time Inventory Management Shift - While only one in ten corporates have attained comprehensive real-time treasury management capability, fully eight in ten are investing in real-time supply chain funding functions.
- Managing Rising Rate Impact on Cost of Funds - Only one in ten firms have been insulated from rising rates impacting their cost of funds as interest rate risk jumps higher. Total debt linked expense for global corporates has increased by a staggering 50 percent for one in three enterprises, doubled for a similar proportion and expanded by over 200 percent for one in five firms with interest expense pressure greatest in LatAm.
- Future Proofing Global Supply Chains - Smart Contracts are the overwhelming key focus area for supply chain visibility technology investment in 2024, nominated by two thirds of global corporates and twice as prominently as FX risk management tools.
- ESG Imperative – COP28 Expectations - Corporates are largely sceptical of UN COP28 resolutions going far enough to curb climate change and demand to see agreed standards regimes and a stronger voice of business being contributed and heard.
For more information, contact workingcapitaladvisory@citi.com
The full GPS report can be read here - Supply Chain Financing - Building Resilience as the New Definition of "Global" Emerges
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