- Castrol releases its latest Global Trade Barometer
- Index highlights the rise of regional economic hubs: Vietnam, UAE, Mexico and the Seychelles
- Vietnam fast becoming Asia’s next success story
Regional supply chains are becoming increasingly important to the global economy, according to the latest
Castrol Global Trade Barometer (CGTB).
Places such as Vietnam, the UAE and Mexico are taking advantage of their prime locations close to large economies with strong demand for what they produce.
At the same time, however, these regional trading hubs are facing mounting competition from neighbouring countries, and will need to invest in infrastructure, innovation and local trading relationships to stay ahead.
Mandhir Singh, COO at Castrol says, “The results of this year’s Barometer highlight the importance of location to economic growth. Nations such as Vietnam and Mexico are providing the supply chains that neighbouring powerhouses such as the US and China demand.”
As a global lubricant supplier, Castrol enables goods to be mined, made and moved around the world. The CGTB is a series of reports tracking the performance and outlook of global trade based on a rolling, five-year forecast of future trade patterns (incorporating a Trade Barometer and Trade Outlook Index). It gives the big picture view of world exports and imports helping senior business decision-makers to understand the drivers of global trade and growth opportunities across five sectors (aerospace, automotive manufacturing, industrial, marine and natural products).
Location, location, location
Vietnam
Fast becoming Asia’s next success story, Vietnam’s location and strong relationship with China make it the world’s second fastest-growing trading nation (Table 1), the third fastest-growing exporter (Table 2), the fastest-growing importer (Table 3) and the fastest-growing trader of natural products (Table 4).
With neighbouring economies using Vietnam as a production base – particularly high-end technology and pharmaceuticals outsourced from China – skills, wages and living standards are all on the up in Vietnam.
And with rapid urbanisation and a youthful population, Vietnam is ideally placed to consolidate its trade position, particularly in the global IT sector.
United Arab Emirates
Determined to develop Dubai as a trade hub, the UAE has invested heavily to improve the country’s infrastructure, promote trade and make it easier to do business.
With its commitment to innovation and development, and proximity to the Middle East and North Africa, the UAE is now the sixth fastest-growing trading nation (Table 1) and the fourth fastest-growing exporter (Table 2).
Dubai has also entered the CGTB Global Port Report’s top ten ports by trade volume at number nine (behind six Chinese locations, Singapore, and Busan in South Korea – Table 5).
Mexico
Free-trade agreements with 44 countries have made Mexico a crucial export base for automakers from Europe, China, Japan and the US. And with growing investment from foreign carmakers, Mexico’s automotive output has soared. It is now the sixth largest automotive trading nation (Table 6), and the ninth biggest automotive importer by value (Table 7).
Mexico is also experiencing a boom in manufacturing, thanks to the country’s proximity to the US, low production costs and skilled workforce. It has become the fourth biggest automotive exporter by value (Table 8), and export growth is expected to continue to 2019 at an annualised rate of 8.38%.
The Seychelles
Proximity to India and China and a growing science and technology sector have helped propel the Seychelles to ninth on the list of fastest-growing exporters (Table 2). It is also the world’s tenth biggest aerospace exporter, appearing in the Aerospace Trade Barometer for the first time (Table 9).
Mandhir Singh, COO at Castrol, says, “These regional hotspots have developed a foothold in their region’s supply chain, but there is increasing competition from neighbouring countries. To stave off the challenge and drive their economies forwards, the hubs will have to find ways to maintain their talent pool, continue to strengthen their infrastructure, and invest in R&D.”
