Supply chains and changing trade patterns

Article tags South-east AsiaSingaporeSupply Chain

We recently concluded our first event in Singapore looking at the world of supply chains and changing trade patterns. Special thanks to our panelists – Nick Marro, Senthil Kumar, Sarindar Pal Kaur Frost & Natalie Clark.

For those who missed it, here are some key takeaways from the discussion:

• Relatively strong growth this year (5.2%) might not translate into evenly strong import performance.
• Growth is unbalanced – with a strong recovery in household and private business demand unlikely until H2 2023.
• Soaring global rates have been driven by China-US West Coast routes – but these are unlikely to return to 2021-22 levels.

Asia remains strong, but it’s export boom is likely over… for now

• Asia’s aggregate real GDP growth will remain stable in 2023 (3.7%, vs 3.4% in 2022, 5.8% in 2021).
• ASEAN’s growth is also strong in 2023 (4.1%, vs 5.4% in 2022, 3.7% in 2021).
• Beyond China & ASEAN, economies like Australia (1.3%), Japan (1%) and India (5%) will all see softer growth.
• Export growth is on a downwards trend, as Asia’s biggest external markets continue to struggle.
• But what about import demand? Intermediate and consumer goods may see some brighter prospects, as FDI diversification picks up.

Asia’s trade pacts will facilitate supply chain expansion

• Harmonisation under RCEP is making some business environments more attractive as sourcing/manufacturing locations (Philippines, Cambodia, Indonesia).
• CPTPP enlargement is improving business and operational conditions for the region, opening markets for future trade flows.
• These won’t compensate for lower global growth in the short term, but in the long term it will increase the region’s competitiveness and develop domestic demand drivers.

Fri, 10th Feb 2023 Article tags South-east AsiaSingaporeSupply Chain