International Trade Set To Drive UK Economic Growth
Posted on 21 Feb 2012
***UK to increase international business activity by around 60% over next 15 years***
***HSBC launches £4billion fund to support UK SMEs trading with new markets***
***HSBC committed to increasing lending to UK SMEs in 2012***
UK businesses will see international trade growth accelerate from 2014 as the global economy ends a period of growth contraction, according to new research from HSBC. HSBC’s ‘Global Connections’ trade forecast predicts that international businesses will recover more rapidly and earlier than previously expected and estimates that over the next 15 years, the UK is set to increase its international business activity by around 60%. Despite the current economic climate the overall trend for international trade is positive, with growth acceleration coming sooner (in 2014) than previously forecast.
HSBC is playing its part in growing the UK economy, in 2011 UK exports rose 13% and over the same period our export related business grew 33%, within which trade finance lending underpinning exports grew 91%.
There are fundamental changes taking place in world trade, UK exports to China and to India grew by 21% and 37% respectively in 2011 and HSBC estimates that it processed around one third of these by value.
SMEs make a substantial contribution to the total value of exports and HSBC is in a unique position to support UK businesses who are, or who are about to, trade internationally. With international trade being the key to future UK growth, HSBC is launching a new multi-billion fund specifically for SMEs that trade with other businesses across the globe. The ‘HSBC International SME Fund’ will provide at least £4billion of lending to SMEs with a turnover of up to £25million and will be available in the coming weeks. The launch of the fund follows a year when HSBC provided lending of over £49billion to UK businesses*, whilst at the same time increasing lending to SMEs by 15% year on year.
HSBC’s net lending to UK SMEs – the real indicator of lending growth - grew by 4% year on year, despite the UK market shrinking over the same period by 6%**. The bank has also committed to lend more to UK businesses in 2012 than it did in 2011.
The Global Connections forecast identifies new “Corridor Creators” who are businesses searching out the best trade partners to drive competitive advantage, regardless of location, defining their own trade routes and corridors. New emerging growth export partners for the UK include Vietnam and Brazil, whilst forecasts predict more imports from countries such as Qatar.
Alan Keir, HSBC Group Managing Director, Global Head of Commercial Banking, said:
“The latest HSBC forecast shows a positive long term outlook for UK businesses. Trading internationally will be critical for not only the British companies who want to remain competitive in the future, but it is also critical to the UK economy. HSBC is committed to increasing lending to UK SMEs in 2012 and the launch of the new £4billion ‘HSBC International SME Fund’ highlights specific support to help SMEs to grow through global trade activity and support for the wider UK economy. The fund also fits perfectly with the bank’s strategy to be the leading international trade and business bank.
“Tapping into the new opportunities and considering partners outside of British borders is just one tactic for businesses competing on a global stage. The HSBC forecast highlights some growing UK sectors that are set to thrive with increased demand particularly from a skills and specialism perspective from emerging markets and existing trade partners and we want to help businesses make the most of this opportunity.”
Sectors with exceptional predicted growth created through demand from emerging exports included:
- Oil and Gas - including platform technology and shipping
- Automotive – exports to China set to grow by 15.10% and to Russia by 6.62% over the next 5 years.
- Medicine – the biotechnology sector in the UK is world class and global in reach. Demand from Europe, the USA and Northern America is set to grow in particular.
For a copy of the global report and for further information contact the HSBC Press Office.
For further information please contact:
HSBC Press Office
Direct 020 7991 2683
Direct 020 7991 8471
Direct 020 7991 4118
For the latest updates, visit the UK Business Press Office social media newsroom:
* Under the Government’s Merlin agreement
** Source: Bank of England Lending Trends data as at November 2011.
About the Trade Forecast
The Trade Forecast has a unique approach to understanding the drivers of trade from a business perspective, informed by: trade trends, measuring merchandise trade, macroeconomic and market influences on trade (for example GDP, oil prices, inflation, foreign direct investment), and business environment influences on trade (including regulation, demographics, access to capital and finance). The research has been commissioned by HSBC and undertaken by Delta Economics.
The economic and business narratives stem from a broader documentary search that includes material from National Statistical Offices, the World Bank and International Monetary Fund, economic blogs, the Economist Intelligence Unit, Bloomberg, the Financial Times and other professional and financial services news websites.
N.B. All values are quoted in US dollars.
HSBC Bank plc: HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people. In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to medium businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc.
The HSBC Group: HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,691bn at 30 June 2011, HSBC is one of the world’s largest banking and financial services organisations.