Emerging markets logistics index
Releasing the Agility Emerging Markets Logistics Index 2016, Essa al-Saleh, President and CEO, Agility Global Integrated Logistics, and John Manners-Bell, CEO, Transport Intelligence, say that India has risen to third rank due to the country’s new leaders
Climbing two rungs by overtaking Brazil and Indonesia, India ranked third in an emerging markets logistics index for 2016 which rates countries based on business environment. The index ranks 45 leading emerging markets using three metrics. Size and growth attractiveness make up 50 per cent of the overall index score, while compatibility and connectedness account for 25 per cent of the overall index score.
Essa al-Saleh, President and CEO, Agility Global Integrated Logistics says, “The year 2015 was characterised by falling trade volumes, depressed commodity prices and geopolitical instability that combined to slow growth in emerging and developed markets alike. According to the International Monetary Fund (IMF), emerging markets growth 4.6 per cent in 2014 slowed to 4.2 per cent in 2015. The IMF forecasts a pickup to 4.7 per cent in 2016.”
John Manners-Bell, CEO, Transport Intelligence said, “India has done substantially well in the past one year and has come up from position five to three. It is the fastest-growing economy and just needs more structural reforms.” He attributed the rise to clarity in rules and taxes and investments coming into infrastructure.
“With China suffering, its trading partners across the region are also affected. On top of this a stronger US economy has meant a flight of capital from East to West, which has led many emerging countries to increase their interest rates, dampening domestic growth further. Air and sea volumes have been weak due to the slowdown in international trade.” Nearly 1,200 supply chain and logistics executives worldwide shared their views on the 2016 global economic outlook, prospects for emerging markets, key growth drivers and trends affecting emerging markets countries. The supply chain industry is bracing for more volatility in the global economy. A large majority of industry executives (61 per cent) are unclear on the direction of the world economy or indicate they expect more turbulence. Their top two concerns are oil prices and China’s economic health. For the first time, supply chain industry professionals see India as the emerging markets country with “the most potential to grow” as a logistics market over the next five years. India edged out China, which was seen as the market with the most potential in past surveys. India also climbed two spots to third, behind China and UAE, in the data-driven Agility Emerging Markets Logistics Index. Its rise was propelled by an initial round of economic reforms and a surging economy. While optimistic, logistics professionals also remain cautious about India. Nearly 42 per cent said India needs more structural reform to sustain its current growth and more than 21 per cent said the country needs more than economic reform if it is to unlock its potential. Trade flows between Asian markets remain the most promising in the eyes of logistics professionals. At the same time, they showed increased optimism about prospects for growth along other key Asian trade routes: Asia-North America, Asia-Africa and Asia-Middle East. Sentiment about Asia-South America trade and South AmericaNorth America trade slipped from a year ago.