Supply chain professionals fear a recession in 2020

By Damian Brett

A new survey shows that the majority of supply chain industry executives anticipate a recession in 2020 amid concerns about downward pressure on global trade volumes, uncertain growth prospects, and ongoing friction between the US and China.

According to the latest Agility Emerging Markets Logistics Index, 64% of industry professionals surveyed say a recession is likely in the next 12 months, while only 12% of the 780 respondents say a recession is unlikely.

At the same time, the survey shows that most logistics executives say their companies will ride out any turbulence in trade relations between the world’s two largest economies.

Meanwhile, 74% of respondents with operations and investments in China say they will stay put and that their plans are unchanged despite the US-China trade battle.

If they were to move production or sourcing from China, Vietnam and India were respondents’ top choices of places to relocate. They identified rising trade barriers as the factor most likely to hurt emerging market growth. 

“The fears of a recession are not to be taken lightly, especially because of uncertainty about the impact of the coronavirus outbreak,” said Essa Al-Saleh, chief executive of Agility Global Logistics.

“A positive sign, however, is that a large number of emerging markets economies were able to weather an array of issues – political and social unrest, structural problems, even international sanctions for some – without losing much ground in the past year.”

The Index ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.

In 2020, the top 10 emerging markets are: China, India, United Arab Emirates, Indonesia, Malaysia, Saudi Arabia, Qatar, Mexico, Thailand and Turkey. 

China, India and Indonesia rank highest for domestic logistics; China, India and Mexico are top for international logistics; and UAE, Malaysia and Saudi Arabia have the best business fundamentals.

The survey is part of the 2020 Agility Emerging Markets Logistics Index, the company’s 11th annual snapshot of industry sentiment and ranking of the world’s 50 leading emerging markets.

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