More than one third of Middle Eastern companies (38 percent) saw their international sales expand in 2020 as demand shifted under the global pandemic.
DP World’s Trade in Transition report shows that 42 percent of companies globally saw international revenue expand during the first half of 2020, compared with 38 percent in the Middle East, 32 percent in Africa and 46 percent in Europe.
However, the same amount of Middle Eastern companies, 38 percent, saw their sales contract in the first half of 2020, compared with 56 percent in Africa and 39 percent globally.
The survey, carried out by the Economist Intelligence Unit (EIU) for DP World, revealed that 48 percent of Middle Eastern companies had difficulty selling to their output to customers during the first half of 2020, compared with 22 percent in Africa and 40 percent globally.
However, the Middle East region fared better when it came to purchasing raw materials for production, with 24 percent experiencing difficulties in the Middle East, compared with 30 percent in Africa and 33 percent globally.
In addition, 28 percent of Middle Eastern companies reported difficulties in arranging logistics or transport services, compared with 48 percent in Africa and 28 percent globally.
Nearly one fifth, or 19 percent, of companies globally showed no negative impact from COVID-19, with no change in sales year-on-year from H1 2019.
Sultan Ahmed Bin Sulayem, CEO and Chairman of DP World, said: “International trade has shown remarkable resilience during the pandemic and will play a critical role in facilitating the global recovery.”
Reconfiguring supply chains
The survey of business leaders in six regions – North America, South America, Europe, the Middle East, Africa and Asia Pacific found that the majority (83 percent), were reconfiguring supply chains to meet changing demand, including by diversifying the countries with which they intend to trade.
In Europe, during the first half of 2020, exports of cereals, particularly to the Middle East, and pharmaceutical products, increased by 23 percent and 12 percent respectively.
Sales overall from North America to the Middle East have decreased, while revenue from Africa to the Middle East is expected to increase by 50 percent.
Globally, 58 percent of companies in construction reported a rise in international trade, particularly from North America, following a demand for home renovations.
“The business community is more optimistic for the future than many expected, and the supply chain challenges exposed by the pandemic have acted as a positive agent for change. We expect the result will be global flows of trade that are more efficient and more robust,” Sulayem said.
The movement of consumer goods across the world is also helping the global trade and logistics industry to rebound, concluded the report, with 81 percent of major consumer goods manufacturers globally expecting exports to have expanded in 2020.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021