International rescue

While Europe flounders, business activity overseas could be set for a major surge amid a shift in trading balances across the world's emerging markets.

The tipping point is coming, HSBC writes this morning, at which emerging markets will see their imports exceed exports.

If the bank is to be believed (few are these days), the good news for export-hungry UK firms is that it’s only five years away as Brazil, China and India all experience a shift in the balance of trade power.

By 2026 the UK will see its international business activity increase by 66%, the bank says, which is an increase on the previous quarter estimates and positive news for the overall long term economic outlook.

HSBC’s Global Connections forecast says in the UK, exports are expected to exceed imports as businesses make the most of the opportunities created by the subsequent increase in demand for goods and services from emerging markets.

Its trade confidence index also supports this prediction with 93% of UK businesses interviewed feeling positive about the outlook for international trade volumes over the next 6 months.

Trader confidence is at 105 on trade confidence index overall. This shows a slight improvement from 2011.

David Beaty, HSBC regional commercial director for the North of England says: “Taking advantage of overseas opportunities can offer businesses significant prospects for growth.  We are seeing an increasing number of our customers looking to trade outside of the UK’s traditional trade partners in Europe, this is reflected in the emerging trade corridors highlighted in this report.”

UK trade is predicted to grow faster than previously suggested and certain sectors are likely to thrive with increased overseas demand, particularly from a skills and specialism perspective.

The data also claims that growth is likely to be greatest in sectors which correlate closely with economic development. Automotives, non-crude oil, medicines and printing are the sectors which the research predicts will dominate world trade over the next 15 years with emerging countries leading the growth.

Brazil is expected to see car imports rise more than 13% over the next five years, with exports up 4.9% by 2016. Chinese imports of cars are expected to rise by nearly 12% by 2016, while Asian and Latin American imports of Medicines are expected to rise by 7% and Latin American imports of Biopharmaceuticals by more than 11% to 2016.

The UK’s fastest growing export sectors are bio-pharma, auto engines, petroleum gases and telephony equipment. This meets the demand from the emerging markets.