Growth opportunities offered by emerging markets outweigh concerns about the political and economic turmoil that rattled some developing countries in 2013, a survey of global logistics and trade executives shows.
Seventy-four percent of logistics professionals view prospects for emerging markets as “good” or “very good” for 2014, an annual survey of industry executives shows. Respondents remain optimistic despite signs that growth is slowing in China, stalled in Brazil and India, and uncertain in other countries that could suffer if the United States reins in monetary stimulus, as expected.
The logistics industry’s optimism comes despite moves by the International Monetary Fund and the Organization for Economic Cooperation and Development to cut 2013-2014 global growth forecasts, citing concerns about emerging markets. Emerging markets currencies and financial markets came under pressure in 2013 amid worries of a possible ripple effect from tighter U.S. monetary policy.
The survey of more than 800 industry executives is part of the fifth annual Agility Emerging Markets Logistics Index. The 2014 Index ranks 45 major emerging markets and identifies factors that make them attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution companies. The Index and survey provide a basis to compare countries, weigh their progress and look at their near-term prospects.
The 45 countries featured in the 2014 Agility Emerging Markets Logistics Index were projected to grow at an average of 6.2% in 2013. The U.S. economy expanded 2.9% while the European Union grew 1.4% according to projections.
“The industry’s confidence in emerging markets shows that logistics executives take a long view and see beyond today’s headlines,” said Essa Al-Saleh, President and CEO of Agility Global Integrated Logistics. “In the past, currency pressures, investor jitters, political instability or a pause in growth was a major setback that undermined confidence about other emerging markets. This time, the industry is staying focused on their enormous potential.”
“Not only does the majority of the world’s population reside in emerging markets but these markets offer expanding middle classes and a younger average age compared to the more developed markets of the US and Europe”, said John Manners-Bell, Chief Executive of Transport Intelligence, which compiled the Index. “The need to meet the rising needs of these markets is a great opportunity for logistics providers but it will also prove a bumpy process as economic, political and other such risks will need to be navigated carefully.”
About the Agility Emerging Markets Logistics Index
The Agility Emerging Markets Logistics Index, developed by Ti and now in its fifth year, looks at the world’s most dynamic economies and the forces powering them. It examines and ranks 45 major emerging markets and identifies the attributes that make a market attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution companies. Together, the Index rankings, analysis and survey of more than 800 industry professionals provide a basis to compare countries and regionals, weigh their strengths and weaknesses, and gauge their near-term prospects. The Index also looks at the inter-relationships among emerging economies and at trade flows between the emerging and developed worlds.