By Daniel Hunter

World trade growth is gaining momentum and is forecast to significantly outpace GDP growth to 2015, according to the HSBC Trade Forecast in its Global Connections report.

Findings from the report show:

· The long term outlook for UK businesses trading internationally is positive
· Exports to MENA and Eastern Europe are predicted to increasingly rise over the next three years
· UK exports to China are set to rise to meet demands of the emerging middle classes

After a challenging 2012, the HSBC Global Connections Trade Forecast outlines a dual speed trade rebound, with emerging markets driving growth to 2015 before being re-joined by the developed world as trade resurges from 2016.

The Forecast predicts a growth in the trade of goods ‘Merchandise trade’ is defined by the WTO as all types of inward and outward movement of goods through a country or territory including movements through customs warehouses and free zones of 6% and global GDP growth of 4% to 2015.

UK exporters will be able to take advantage of increased demand among the economies of Eastern Europe. UK exports to Poland, for example, are expected to grow by over 7% a year during 2013-15.

Exports to the Eurozone should subsequently rebound as the region’s economy stabilises. UK exports to Europe (excluding Russia) are forecast to rise by just over 5% a year over the five years to 2020, before stabilising at around 4% per year over the following decade.

In light of the economic challenges facing Europe, it is clear that the greatest opportunity for UK exporters lies with the rapidly expanding emerging markets. Growth is likely to prove particularly buoyant in the near term as these economies recover from their recent slow-down. UK exports to Asia (excluding Japan) are forecast to grow by close to 11% a year during 2013-15 and by 9% a year during 2016-20. India is expected to be the most dynamic trade route in the region throughout these two periods.

Strong growth is also forecast for UK exports to the Middle East and North Africa, which are set to rise by 10% a year during 2013-15 and by 7% a year during 2016-20.

“The latest HSBC forecast shows a positive long term outlook for UK businesses," Steve Box, HSBC Head of Trade and Receivables Finance Europe commented.

"Trading internationally continues to be critical not only for the British companies who want to remain competitive in the future, but it is also critical for the UK economy.

"It remains clear that world trade will continue to underpin business growth in both the near and longer term, with trade growth set to outpace GDP growth to 2030.

"Emerging economies will drive this economic growth, but interestingly the forecast also highlights countries like the UK and USA who are planning to capitalise in the short term on growth in these emerging markets, with forward-thinking businesses diversifying their developed market counterparts to seek new opportunities."

The forecast predicts that the USA will overtake Germany to become the most important market for UK exports by 2030. This is largely a reflection of the brighter economic prospects in the USA. Although the share of UK exports destined for China is set to grow, this will not be sufficient to push it above fifth place in the UK league table of trading partners.

Growth of domestic demand in the UK is set to accelerate as the legacy of the financial crisis fades. This will be aided by a steady loosening in credit conditions and recovery in the financial sector. While much of this growth in demand will be claimed by exporters in Asia, the UK’s proximity to rapidly expanding emerging markets in the Middle East and North Africa (such as Turkey and Egypt) will also support imports from these economies.

According to the Trade Forecast, the powerhouses of India and China will be joined by emerging trading nations including Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in the next three years.

This is being driven by growing and higher value exports from these markets to each other — and the world — as their economies industrialise, and a focus globally on emerging economies with large populations and rapidly growing middle-class consumer markets.

The developed world will begin to regain traction from 2016 onwards, as it gradually redirects trade flows to emerging markets and as the impact of structural reform is felt. However, even in the short term, two key developed markets are seeing significant rates of growth as trade corridors with emerging markets strengthen. The UK is predicted to accelerate trade growth to Asia (excluding Japan) by just over 10% and with India by 13% (all annualised 2013-15 and 8% 2016-20)

“Foreign trade has been a defining feature of Britain’s economic history, and will be a firm foundation of our future," Nick Baird, Chief Executive of UK Trade and Investment said.

"What HSBC’s Global Connections trade forecast tells us is that International trade is becoming increasingly important to the growth of UK companies. UKTI's Export Week campaign, which commenced today, will offer thousands of companies the opportunity to learn more about how to succeed overseas.

"Over the next five days, UKTI is holding over 100 events across the UK, to provide bespoke advice to both new and experienced exporters about the profitable opportunities abroad. Please visit http://www.exportweek.ukti.gov.uk/full/ to learn more about Export Week and to find events in your local area."

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