IMPROVEMENTS in the Asian manufacturing sector should give confidence to international markets, president and CEO of Agility Global Integrated Logistics Essa Al-Saleh says.

Almost two-thirds of the global supply chain executives surveyed for the 2020 Agility Emerging Markets Logistics Index offered a pessimistic outlook, saying global recession was likely or very likely in 2020.

“Concern is justified, but underlying some of this is simple uncertainty,” Mr Al-Saleh said.

“Producers, shippers, forwarders and carriers find it impossible to plan, forecast and make decisions in an ever-shifting climate of tit-for-tat tariffs and volatile fuel prices, not to mention new protectionist measures, sanctions and compliance rules.”

Mr Al-Saleh noted the US-China trade battle had cooled “in a welcome development”, with the signing of an agreement putting off additional tariffs.


“At the same time, manufacturing has shown recent signs of stabilising and picking up in the Philippines, Thailand, Malaysia, India and China,” he said.

Mr Al-Saleh said 2019 would be remembered as “a rough year” in logistics and shipping, marred as it was by the US-China trade war, Brexit confusion, the looming arrival of new emissions rules for ocean shipping, among other events.

“These changes are altering the global economy and should help make most emerging markets more resilient and stable over the long term,” he said.

“Of note is that global output continues to rise, but the share of output traded across borders is falling.”

This was, he said, due to emerging markets countries consuming more of what they made.

“They are less dependent on foreign imports – of both finished goods and inputs – because they are getting better at producing high-value goods and a broader array of the products they need,” he said.

Mr Al-Saleh said long-haul trade was declining at the expense of intra-regional trade, especially in Asia.

“The implications are profound for emerging market countries, none more so than countries in Africa, Latin America and the Caribbean that are still trying to find their place in the global economy,” he said.

“Global value chains and supply chains are becoming more knowledge-intensive.”