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Indiaexportnews.com

Global logistics execs pick India as leading investment spot

  24.01.2017    

Logistics executives pick India is their top investment destination and say the health of China’s economy is likely to set the tone for emerging markets overall in 2017 in a new supply chain industry survey. 
The annual survey of more than 800 logistics professionals is part of the 2017 Agility Emerging Markets Logistics Index, an annual snapshot of industry sentiment and a ranking of the world’s 50 leading emerging markets by size, business conditions, infrastructure and transport connections.
China, the world’s second-largest economy, again topped the 50-country ranking. India climbed past the United Arab Emirates (UAE) to the No. 2 spot, its highest-ever Index ranking. Malaysia at No. 4 and Indonesia at No. 6 were unchanged from a year ago.
In the survey, industry executives identified India as the emerging market with the most potential as a logistics market and as the place their companies are most likely to invest in the next five years. Twenty-three percent of survey respondents said passage of a key tax reform made their companies more likely to invest in India.
“India’s economy has grown faster than any in the world over the past two years,” said Chris Price, Asia-Pacific CEO of Agility Global Integrated Logistics. “Tax and economic reforms have added to enthusiasm about India, although that optimism has been tempered somewhat in the short-term by the government’s surprise decision to remove large bank notes from circulation and encourage broader use of cashless forms of payment.”
Seventy-six percent of survey respondents said China’s economy is slowing, but only 17% said the slowdown is significantly hindering the transport and logistics sector. Nearly 66% said a slowing Chinese economy will not alter their businss or expansion plans in China.
“Vietnam, India and other countries have lured away some production with cheaper wages and incentives,” Price said. “But the e-commerce revolution in China is driving huge inbound freight volumes and reflects a healthy shift toward growth that’s balanced between exports and domestic demand.”   
The Index, in its eighth year, ranks emerging markets countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors. Other 2017 findings:

•    Iran leaped eight spots to No. 18 in the Index and climbed from 9th to No. 15 among countries that survey respondents say has the most potential to grow as a logistics market. Iran’s gains were the largest of any country in the 2017 Index or survey.

•    Despite their upbeat views of India and Iran, industry professionals sounded notes of caution about the broad outlook for emerging markets. Nearly 69% expressed concern that the UK’s Brexit vote and the failure of global and regional trade initiatives signal a threat to trade. A sizeable minority – 43% - said the International Monetary Fund is too optimistic in forecasting 4.6% growth for emerging markets in the coming year.

•    Malaysia’s transport infrastructure and ocean/air connections ranked second overall behind only those of the United Arab Emirates.

•    Pakistan improved its year-to-year ranking, jumping three spots to No. 17. Thailand (No. 15) and Sri Lanka (No. 32) both fell two spots. Rankings for other Asia-Pacific markets: Philippines (16); Vietnam (19); Bangladesh (27); Cambodia (45).

•    Myanmar (48) was added to the Index for the first time, along with Iran (18), Ghana (39), Angola (49) and Mozambique (50). Previous-year scores were calculated for those countries to give a basis for year-on-year comparisons.

“Emerging markets continue to deliver the highest growth rates in the world, but as links in the global supply chain, countries can be extremely hard to evaluate,” said Essa Al-Saleh, CEO of Agility Global Integrated Logistics. “The Index and the survey are useful when it comes to identifying the relative strengths and weaknesses of individual markets.”   
Transport Intelligence (Ti), a leading analysis and research firm for the logistics industry, compiled the Index.
John Manners-Bell, Chief Executive of Ti, said: “Uncertainty and volatility have characterized many emerging markets in 2016. This has been compounded by the political environment in Europe and the U.S., which will have direct consequences on trade with Latin America, Asia and Africa. However there have been many positives too -- for example, the strong performance of India. More than ever, the Index identifies and contrasts those markets which will prosper from the most vulnerable and poorest performing.”
Other findings:

•    Africa’s biggest economies – Nigeria and South Africa – were among the countries that fell most sharply in the Index. Smaller African markets – Uganda, Ethiopia, Tanzania,  and Kenya – improved their rankings in 2017.

•    Brazil held its No. 7 Index ranking despite a painful recession and the impeachment of President Dilma Rousseff. In the survey, logistics executives again picked Brazil as the the market with the most logistics potential after India and China. One reason for their optimism: nearly 57% expect commodity prices to rebound in 2017, although most do not expect significant increases.

•    Bahrain, which fell in the Index amid social unrest in recent years, jumped five spots in the latest Index to No. 23; Argentina, attempting to end years of international economic isolation, climbed three places to No. 28. Kazakhstan shot up four spots to No. 14, largely on the strength of business conditions that ranked behind only those of four Gulf countries – UAE, Qatar, Oman and Bahrain.

•    Turkey weathered the effects of an attempted coup and extremist violence, moving from 10th to No. 9 in the latest Index. Russia fell from 9th to No. 10, a modest slip suggesting that has contained the fallout from Western economic sanctions and low energy prices.   



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