The U.S. is expected to retain its position as a leading technology goods exporter for the next two decades, according to trade research conducted by international bank HSBC.
Technology-intensive goods are expected to account for 17% of the total growth in U.S. export goods for the rest of this decade, HSBC stated. U.S. exports will be driven primarily by industrial machinery, followed by transport equipment and scientific apparatus.
Optimism about trade generally among U.S. business leaders is at its highest level since the bank began conducting its semiannual trade survey. The U.S. HSBC Trade Confidence Index rose to 115 from 114 six months ago and was higher than the global average of 113. The index surveys small and middle-market businesses, including 250 in the U.S.
HSBC forecasts that U.S. trade will grow 6% annually from 2014 to 2016. The bank expects global trade to grow 8% annually to 2030.
U.S. exports set a record in 2013, reaching $2.3 trillion. In 2013, the United States had a trade surplus in services of $229 billion and a goods deficit of $703.9 billion for a total trade deficit of $474.9 billion. That was nearly at $59.8 billion improvement from 2012.
U.S. manufacturers, wholesalers and retailers were the most optimistic about trade, HSBC found, with more than 70% expecting stronger trade outflows. Of the business leaders surveyed, 50% cited increased global demand and improved economic conditions in key industries, including manufacturing, as primary drivers for the increased business.
But while trade optimism is high, HSBC warned that the U.S. will have to increase its research and development investment to maintain its position in an increasingly competitive global economy.
“As an owner of the intellectual property of high value goods, the U.S. and other developed economies currently dominate the global technology export market, but under-investment in R&D over the long term can pose a competitive threat,” said Prabhat Vira, regional head of Global Trade and Receivables Finance in North America for HSBC. “The world economy is becoming more knowledge-intensive and for the U.S. to retain its lead, it’s crucial that businesses continue to invest in research and innovation.”
Canada, Mexico and China are expected to continue to rank as the top destination for U.S. exports over the next two decades, HSBC stated, followed by Korea and Brazil.
U.S. business leaders view Asia as the most promising export region (33%), followed by Latin America (28%). Within Asia, Vietnam and Korea are the fastest growing export destinations for the U.S. but China is seen as the market with the greatest long-term potential.