Businesses are concerned about the cost of rising protectionism, yet are optimistic about their international business prospects, according to a new report from HSBC, ‘Navigator: Now, next and how for business.’
Of the 6,000 firms surveyed globally, three in five (61%) think governments are becoming more protective of their domestic economies. This sentiment is strongest among companies in the Middle East and North Africa (70%), and Asia-Pacific (68%). In the USA, 61% believe protectionism is on the rise, while in Europe, half (50%) are seeing a rise in protectionist tendencies.
The majority of firms are looking to regional partners to develop trade opportunities, with almost three quarters (74%) of overseas trade in Europe and Asia-Pacific being conducted within their ‘home’ region. This trend is set to continue with regional ties being prioritised in firms’ expansion plans for the next three to five years.
“In line with the findings of this research, Maltese firms are well positioned to capitalise on the rise of regionalism and as well as the optimistic business sentiment with geographical linkage into important global trade corridors,” explained Gaetano Sammut, HSBC Malta Country Head for Trade and Supply Chain.
He added that Malta is well linked into global trade flows, especially those passing through the European continent. In fact, according to the National Statistics Office of Malta, the country’s exports to neighbouring European countries in 2017 topped all other regions of the world – with exports towards the European Union totaling €1,263 million out of the global exports of €3,207 million. Markets in Asia and Africa trailed the EU with €594 million and €557 million respectively. Malta’s highest exports were towards Germany at €398 million, Italy at €257 million and France at €231 million.
In 2017, Malta’s imports totalled €5,931 million with the majority, €3,174 million, coming from the European Union. This was followed by Asia at €932.9 million and North and Central America at €504.2 million. Malta’s main European imports were from Italy at €1,174 million, followed by Germany at €418 million, and the UK at €395 million.
The HSBC survey further showed that firms are focused on growth, with more than three in four (77%) businesses optimistic about their international business prospects, and expect the volume of trade to increase over the next 12 months. Reasons behind this confidence include an increase in demand for their products from consumers and businesses (33%), favourable economic conditions (31%) and the greater use of technology (22%) in driving growth.
HSBC Malta Head of Commercial Banking Michel Cordinasaid: “Overall, companies across the globe are showing remarkable agility in navigating the changing trade policy landscape. They are getting on with adapting business plans, and relationships, to participate in shifting supply chains. Strategies include increasing regional trade, establishing joint ventures or local subsidiaries in more markets, and capitalising on trends in consumer demands and digital technologies.
He added: “By taking time to understand the emerging drivers and impediments to trade, businesses in Malta can identify risks and opportunities, and make informed decisions for future growth. HSBC’s international connectivity has been instrumental in helping hundreds of Maltese businesses to expand across borders. With this global connectivity, invaluable market insight, and via the Malta Trade for Growth initiative, HSBC Malta is best placed to help businesses access opportunities across the globe. This initiative supports Maltese businesses to thrive internationally and the local economy to prosper.”
The full report can be accessed here: http://www.business.hsbc.com/trade-navigator