October 01, 2012

U.S. High-Tech Executives Appear More Confident about Global Trade and Exports


U.S. high-tech executives appear more confident about global trade and exports than they were two years ago.

Some 85 percent of U.S. high-tech executives said the Obama administration's goal to double exports by 2014 is either "very likely" or "somewhat likely" to be achieved, according to a recent survey undertaken for United Parcel Service.

These new percentages compare to a much lower 40 percent confidence level about the goals found two years ago.


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The UPS "Change in the (Supply) Chain" survey was conducted by IDC Manufacturing Insights. Those taking part in the survey were U.S.-based senior supply chain executives in the high-tech/electronics industry. They were questioned between May and July 2012.

In addition, close to one in three executives said the goals were achievable because of the increased disposable income found in emerging markets, according to the survey. Another third credited increased salaries in manufacturing countries. And 20 percent said recent free trade agreements in Asia, and other legislation, were responsible for the increased chances for meeting the goals.

Also, 81 percent of U.S. high-tech executives predict recent free trade agreements in Asia will lead to more imports and exports to and from Asia.

In addition, demand for high-tech products is expected to decrease by seven percent in North America over the next several years. But demand in other regions is predicted to increase by as many double-digit percentages. 

Sales/fulfillment in India, the Middle East and Africa will likely jump by 22 percent.  Brazil will increase by 18 percent. Sales/fulfillment in other South American regions is expected to increase 19 percent. Eastern Europe will increase 15 percent, Korea will go up 13 percent, and in China and in other parts of Asia – they will see eight percent increases.

"The anticipated shift in consumer market demand for high-tech goods brings opportunities and challenges for high-tech companies," Ken Rankin, high-tech marketing director at UPS, said. "Global demand will continue to grow in new and existing markets, causing supply chain executives to shift not only their fulfillment operations but also their sourcing strategies to serve those markets. We have already begun to see such a shift as companies look to India and Brazil as key markets not only for fulfillment but for production as well."

In addition, 21 percent of those U.S. executives say the goals from the Obama administration are "very likely" to be achieved. Also, 74 percent of high-tech executives believe they will see increases in exports of their own company's products within the next two years.

"The winners will be those companies that successfully leverage the emerging market growth with strong products and execute import/export excellence,” Rankin added in the statement.

The survey also revealed that most U.S. high-tech companies predict they will export more cell phones, tablets and other electronic devices over the next two years to growing middle-class consumers in developing nations, Reuters reported.

A free trade agreement between the United States and Panama will soon go into effect. The U.S.-Colombian free trade agreement went into effect in July. The U.S.-South Korean free trade agreement went into effect in March.

In a related matter, jobs supported by U.S. exports increased some 1.2 million between 2009 and 2011.

In other recent news, U.S. factories saw some increases for the first time in four months. Brad Holcomb, who heads up the Institute for Supply Management's manufacturing survey, said the September increase in factory activity may be related to more demand for cars and slight increases in the housing industry. Some other sectors remain weak. The economy remains a top issue in the current U.S. presidential campaign.




Edited by Brooke Neuman



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