Logistics Industry Concerned About China, Hopeful About Other Emerging Markets - Global Trade Magazine
  January 28th, 2016 | Written by

Logistics Industry Concerned About China, Hopeful About Other Emerging Markets

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  • Falling oil prices and China’s economic slowdown were seen as the top risks for the global economy.
  • 77 percent of logistics providers said they have or will adjust their plans for the Chinese market.
  • Growth drivers in emerging markets—rising middle class, poverty reduction, growing populations—remain consistent.

The logistics and supply-chain industry is wary of China’s slowdown but is hopeful that there will be growth in other emerging economies, according to the 2016 Agility Emerging Markets Logistics Index.

To develop the index, 1,118 executives working in the logistics and supply-chain industries were surveyed on their impressions of the state of the industry. They were also asked to rank the top 45 emerging markets in the world based on factors such as size, business conditions, and infrastructure.

Falling oil prices and China’s economic slowdown were seen as the top risks for the global economy by the executives. Along the same lines, the top risk in the Asia-Pacific region was viewed as economic shock, replacing natural disasters and corruption as the chief concerns.

China’s slowdown has also had an enormous effect on logistics service providers plans for the world’s second-largest economy. Over three-quarters of those surveyed said they have or will adjust their plans for the Chinese market if the country’s economic problems are not resolved. Over 21 percent said they will reassess their entire emerging markets approach to as a result of the turbulence in China.

“It was a volatile year for emerging markets, and you see that in the index,” said Essa Al-Saleh, president and CEO of Agility Global Integrated Logistics. “Eight of the top 10 emerging markets shifted places. Despite the turbulence, the fundamentals driving growth remain consistent – a rising middle class with spending power, progress in poverty reduction, growing populations. That’s why we are still positive on the outlook for emerging markets and see them driving global growth.”

Although China was still the leading emerging market in the index, India was the country with the highest growth potential, according to the survey respondents. India, which climbed two places to third, surpassed China for the first time in terms of growth potential.

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