Emerging markets weathered the global slowdown in 2012 better than developed countries that are their main markets, according to the 2013 Agility Emerging Markets Logistics Index.
The 45 emerging markets featured in the 2013 index grew at an average of 4.4 per cent. In contrast, the US economy grew at 2.2 per cent while the EU contracted 0.2 per cent.
Essa Al-Saleh, president and CEO of Agility Global Integrated Logistics, said: “This year’s Index – in terms of the hard data and industry sentiment – is encouraging when it comes to the promise of emerging markets. It shows that they remain resilient and will continue to offer some of the best opportunities for near-term and long-term business growth.”
Seventy-three per cent of those surveyed feel prospects for emerging markets in 2013 are “good” or “very good.” The figure is about the same percentage as a year ago – but the number who feel ‘very good’ is up sharply, to 22 per cent from 14 per cent. The global outlook is cloudier: 46 per cent expect modest global growth while 47 per cent say global GDP will be flat.
The deepening economic crisis in Europe weighed down emerging markets in 2012. The EU economy contracted 0.2 per cent, and the region experienced sharp downturns in air and ocean freight volumes.
China’s exports to the EU were particularly hard hit – ocean freight fell 9.8 per cent and air freight dropped 11.7 per cent. Likewise, ocean and air imports and exports flowing between India and the EU fell.
The United States topped the EU as the leading destination for air freight out of China. Industry sentiment echoed the trade data: 68 per cent of trade and logistics professionals say Europe’s economy will stay flat or shrink in 2013. Only 2 per cent see growth in European economies this year.
Russia kept its No. 7 spot in the 2013 Index, but it trails the other BRIC countries in overall attractiveness. Russia’s Index metric improved more than those of China, India and Brazil – and Russia’s economy continued to grow – but oil, gas and minerals remain the overwhelming drivers of the economy. Russia needs to reduce reliance on energy and mining sectors if it is to sustain its growth.
Of the BRIC countries, only 9 per cent of industry professionals identified Russia as having the best growth outlook. In the larger context of all emerging markets however, the Index places Russia at the forefront for investors: the survey ranks Russia 4th after China, India and Brazil as a major logistics market of the future and 4th for potential future investment.
Turkey moved into the top 10 in the Index country rankings for the first time. Turkey is a market with high potential and comparatively few barriers to entry. As with Mexico, it benefits from renewed interest in “near-sourcing” among manufacturers drawn by its relatively low labour costs and proximity to a major market, in this case Europe.
Ukraine was another rising star in Europe, moving up four places to No. 20 in the overall Index.
The Agility Emerging Markets Logistics Index, now in its fourth year ranks 45 major emerging markets and identifies the attributes that make them attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution property companies. Together, the Index rankings, analysis and survey of 375 industry professionals provide a basis to compare individual countries, weigh their strengths and weaknesses, and gauge their near-term prospects.
“This year’s Index shows once again the importance of emerging markets to the development of the global logistics industry,” said John Manners-Bell, Ti’s chief executive.