Supply chain executives expect to see stronger emerging market growth in 2016, despite an array of concerns ranging from further weakening of Chinese economic growth, fluctuations in oil prices, and the possibility that the U.S. economy could weaken.
Indeed, the year ahead will bring with it new found uncertainty and complexity in emerging markets. According to the Agility Emerging Markets Logistics Index 2016, though, supply chain executives are optimistic about emerging market performance in the year ahead. Following the turbulence of 2015, some 59% expect emerging markets to show their resilience and record stronger growth in the year ahead.
These results come from a new survey of more than 1,100 global logistics and supply chain executives, and forms a central part of the Agility Emerging Markets Logistics Index 2016. Jointly published by Transport Intelligence and Agility, the Index, now established as an industry benchmark in its 7th year, provides a snapshot of logistics industry experiences and expectations as well as a ranking of the world’s 45 most promising emerging logistics markets.
As part of the survey, supply chain executives also revealed that India has replaced China as the emerging market with most potential for growth. In a year that saw China’s economy slow and end a run of unprecedented growth that began in 1990, ‘economic shocks’ replaced ‘natural disasters’ as the most significant supply chain risk in Asia Pacific. China’s slowdown has also had a staggering effect on logistics service providers plans for the world’s second-largest market; some 77% of those surveyed indicated they either already have or will adjust their plans for the Chinese market if its economic troubles do not ease. More than one fifth (21.8%) see a need to adjust their entire approach to emerging markets as a result of the turbulence in China.
The fluctuating fortunes of emerging markets are also revealed in the data-driven portion of the Index which ranks markets based on their economic size and growth, business environment, and domestic infrastructure as well as connectivity with other regional and global markets. Overall, the Index illustrates an emerging market’s attractiveness to the whole spectrum of logistics service providers as well as to major retailers, shippers and manufacturers.
According to the Index, China remained the leading emerging market by a large margin in 2016. A Middle Eastern country was again ranked in 2nd position, but 2016 sees UAE replace Saudi Arabia in the slot behind China. UAE’s rise was driven by its top rankings in both the market compatibility measure, which assesses the attractiveness of a market’s business environment, and the market connectivity measure, which gauges infrastructure and the access offered to both regional and global markets. India’s economic progress under Narendra Modi saw it rise to 3rd, reinforcing the message supply chain executives highlighted regarding the market’s potential.
The turbulence of 2015 was less kind to Brazil, however, as the regional powerhouse slipped to 6th on the back of its economic woes. Elsewhere in the Index, Nigeria (17th) and Egypt (22nd) both climbed 10 spots, jointly posting the biggest ever gains seen by any country in seven years of rankings. Nigeria’s rise was powered by updated economic performance measures which revealed the true potential of the market, while Egypt’s return to relative stability following the Arab Spring is increasing confidence in its economy and business environment.
Ti’s Chief Executive, John Manners-Bell, said of the results, “The world’s economy is still riven by instability and emerging markets such as China and Brazil have not been immune. However others, such as Mexico, are in a far stronger position and will benefit from the economic growth experienced in the US and Europe. More than ever, investors in emerging markets need to be discerning and the results of our Index are critical to provide clarity in a confusing and complex world.”
About the Agility Emerging Markets Logistics Index
The Agility Emerging Markets Logistics Index uses economic and trade data, social indicators and transport development to rank 45 emerging markets countries for their potential as logistics markets. Now in its seventh year, the Index is written and compiled by Transport Intelligence’s industry leading research team of market analysts and consultants. To compile the Index Ti surveyed more than 1000 global logistics and supply chain professionals.
Download your copy of the Agility Emerging Markets Logistics Index here: http://www.transportintelligence.com/r.php?linkID=1121
