Trade confidence remains flat
(14 May 2010 – Australia) Despite the majority of trade-oriented businesses in Australia seeing the booming emerging markets in Greater China and Southeast Asia as the most promising regions for trade growth in the next six months, confidence has stayed flat as Australia’s traders remain stuck in a developed market mindset, according to HSBC’s latest Trade Confidence Index.
Australian exporters and importers expect trading business conditions to marginally improve but their overall level of confidence has remained static since the second half of 2009, when Australia recorded the highest jump among the countries surveyed.
The index shows that traders are increasingly concerned about the impact of rising interest rates and foreign exchange fluctuations on their businesses in the next six months.
Andrew Skinner, head of trade and supply chain for HSBC in Australia, said that while Australia’s traders remain positive about the future, the survey suggests they are tentative in their outlook as the volatility of exchange rates and rising interest rates weigh on their minds.
Australia’s confidence positions it among the developed economies, yet almost three out of five Australian respondents are trading with the booming emerging markets of Greater China and Southeast Asia and more than half cite these areas as the most promising for growth. This suggests a gulf between expectations and the positive economic reality, Mr Skinner added.
The bank’s head of trade said that the evolving dynamics of intra-Asian trade has put Greater China at the centre of activity, with markets like Australia continuing to gear up for increased trade with this bloc.
Last year, China became Australia’s largest trading partner and the nation’s largest export market with two-way trade reaching A$83 billion.
With China's economy set to grow at a rate of around 10 percent in 2010, Australian businesses appear to underestimate the extent to which they will benefit as the shift of economic power from West to East grows apace.
Australia’s trade-oriented businesses need to unshackle themselves from their developed market mindset and embrace the opportunities they have as part of the dynamic emerging markets region of Asia, Mr Skinner said.
The index shows that traders are increasingly concerned about the impact of rising interest rates and foreign exchange fluctuations on their businesses in the next six months.
Andrew Skinner, head of trade and supply chain for HSBC in Australia, said that while Australia’s traders remain positive about the future, the survey suggests they are tentative in their outlook as the volatility of exchange rates and rising interest rates weigh on their minds.
Australia’s confidence positions it among the developed economies, yet almost three out of five Australian respondents are trading with the booming emerging markets of Greater China and Southeast Asia and more than half cite these areas as the most promising for growth. This suggests a gulf between expectations and the positive economic reality, Mr Skinner added.
The bank’s head of trade said that the evolving dynamics of intra-Asian trade has put Greater China at the centre of activity, with markets like Australia continuing to gear up for increased trade with this bloc.
Last year, China became Australia’s largest trading partner and the nation’s largest export market with two-way trade reaching A$83 billion.
With China's economy set to grow at a rate of around 10 percent in 2010, Australian businesses appear to underestimate the extent to which they will benefit as the shift of economic power from West to East grows apace.
Australia’s trade-oriented businesses need to unshackle themselves from their developed market mindset and embrace the opportunities they have as part of the dynamic emerging markets region of Asia, Mr Skinner said.
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