LONDON--(BUSINESS WIRE)--A Grant Thornton global survey of 2,500 businesses in 36 economies finds that while planned export activity has hit an 18-month high, there are significant challenges ahead as exporters must balance positive long-term trends against the potential for sudden policy shifts.
“For businesses thinking about their future export plans, assessing longer-term trends and sudden changes in government policy will be a balancing act, according to the data from our last quarterly Grant Thornton International Business Report (IBR).” said Paul Raleigh, Grant Thornton Global Leader- Growth and Advisory services.
Countries with the greatest increases in planned exports over last quarter are Germany (up 13pp to 35% from 22%), Greece (up 8pp to 34% from 26%), India (up 6pp to 34% from 28%), the Netherlands (up 12pp to 30% from 18%) and Ireland (up 10pp to 28% from 18%).
“Export expectations are up in the G7 (up 3pp) and the EU (up 2pp),” said Raleigh. “This suggests businesses are aiming to tap into the US market, resurgent under the new administration.”
At the same time, the proportion of US businesses planning to increase investment in plant and machinery over the next 12 months shot up to 41% in Q1 2017 – the highest figure for three years. Providers of capital goods in other countries, which hope to meet that demand, have responded – Germany, with export expectations up 13pp, is a prime example.
News around trade deals has an understandably significant impact on business’ export plans. Again, many recent headlines focus on the US.
“In Canada, export expectations fell significantly in Q1 to 9% (down 10pp) – which coincided with the new US administration declaring it may scrap the North American Free Trade Agreement (NAFTA),” said Raleigh. “In recent weeks, however, it appears NAFTA may be renegotiated rather than ended. It will be interesting to see how firms in Canada and Mexico respond next quarter.”
“What’s clear is that despite current export confidence, business plans will need to be flexible,” said Raleigh. “The most successful businesses will assess the likely impacts of both longer terms tends and sudden shifts in policy, and be ready to react swiftly and decisively.”