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Trade optimism among U.S. business leaders is at an all-time high and the U.S. is positioned to retain its dominance as a global technology export leader, including in industrial machinery, for the next twenty years, according to research by HSBC.
However, to maintain its supremacy, the U.S. will need to increase research and innovation investment, according to data from the latest HSBC Global Connections Trade Report, which includes the short-term trade trends from the HSBC Trade Confidence Index and mid- and long-term trade outlook from the HSBC Trade Forecast.
U.S. wholesalers/manufacturers most optimistic about stronger trade flows
The U.S. HSBC Trade Confidence Index rose to 115 from 114 six months earlier, the highest level since its inception, and higher than the global average of 113, driven by stronger global demand and increased private sector confidence. The index is an international survey of small and middle market businesses engaged in cross-border trade including around 250 in the U.S. Unexpectedly strong recovery in leading industrialized nations, including the U.S., has boosted global trade confidence, according to the report.
U.S. wholesalers, retailers and manufacturers were the most optimistic about the six month trade outlook with more than 70 percent of these sector leaders expecting stronger trade flows. Other key findings include:
Two thirds of U.S. respondents expect trade volumes to rise in the next six months
50 percent cited increased global demand and improved economic conditions in key industries, including manufacturing, as key drivers of the increased business.
Most U.S. business leaders still see Asia as the most promising export region (33 percent), followed by Latin America (28 percent).
Within Asia, Vietnam and Korea are the fastest growing destinations for U.S. exports in the near term; China is expected to be the market with the greatest upside potential over the longer term.
Canada, Mexico and China are expected to continue to rank as the top destinations for U.S. exports for the next two decades, with Korea and Brazil rounding out the top five.
“The U.S. has a highly educated workforce, advanced technology and high R&D investment rates,” said Steve Bottomley, HSBC Group General Manager, Senior Executive Vice President and Head of Commercial Banking for HSBC in North America. “And with high demand growth in emerging markets longer term, U.S. businesses and exporters should greatly benefit.”