United Kingdom Freight Transport and Shipping Report 2016 - Business Monitor International - Industry Reports

United Kingdom Freight Transport and Shipping Report 2016

United Kingdom Freight Transport and Shipping Report 2016 - Business Monitor International - Industry Reports
United Kingdom Freight Transport and Shipping Report 2016
Published Sep 24, 2016
52 pages — Published Sep 24, 2016
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BMI View: We have made a preliminary downgrade to our medium-term trade forecasts to account for effects of uncertainty and stalling of investments during Brexit negotiations. The weakened macroeconomic prospects for the UK, US and EU are pivotal for our forecasts, as is the volatility in sterling, which will determine the extent of erosion of imports, but also provide a boost to exports. We see upside risk to our forecast if the UK is able to negotiate a deal that will place it in a privileged trading position with the EU, but the rise of protectionist tendencies in global trade represents a notable long term, downside risk to the UK s trade prospects outside the EU. The four parameters that will be crucial in driving the direction of UK trade growth to the end of the forecast period are: (i) the terms of the final Brexit deal, (ii) commodity prices, (iii) the macroeconomic prospects of major trading partners as well of those of the UK itself, and (iv) currency volatility. Our commodity price forecasts see a broad based recovery for most energy and industrial metal commodities in ---- onwards, which will increase the value of trade for the UK, even though volume growth will be muted. ...Sterling weakness will provide a boost to exports, but in tandem also undermines the purchasing power of importers, whether they are households or manufacturers, cancelling out some of the effects of the exports boost on the country s net trade position. Editor s note: All BMI trade forecasts and analysis below refer to trade in goods only, therefore exclude trade in services.

...Considering how vague the current situation is, we have refrained from setting out and quantifying the terms of the pending Brexit that will govern trade. Given that our Political Risk team has a view that the negotiations will be concluded by H---, at which time the UK will disengage (the extent of which is to be seen) from the EU, this provides a framework for our trade forecasts to show some weakness during negotiations, arising from uncertainty. ...In terms of trade areas/agreements there is a spectrum of options and the Brexit negotiations will determine where on the spectrum the UK will belong in future. On one end of the spectrum is the EU Common Market, which only includes the EU--- members and allows for free movement of goods, services, capital and people; the next block along the spectrum is the European Free Trade Association (EFTA), a free-trade area, which in addition to the EU--- also includes Norway, Iceland, Lichtenstein and Switzerland and allows for privileged access for movement of goods, services and people, but does not allow these four countries a say in rules and regulations (Norway, Iceland and Lichtenstein have negotiated some access to the EU Common Market as well). Outside the EFTA and the next level of trade partnership on this spectrum is the Customs Union, which the EU & EFTA countries have with Turkey, which allows the free movement of goods only. ...We believe it will be a unique agreement that the UK government will push for, therefore not adopting the Swiss or Norwegian models as such, which will be somewhere between the Common Market and the EFTA.

...< ALACRA META ABSTRACT>BMI View: We have adjusted down our trade forecasts for the UK following the Brexit vote, in line with a downgrade of our expectations for the overall macro outlook. The main transmission mechanism within our five-year forecast period is the FX volatility and stalled economic activity as uncertainty persists. ...

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Business Monitor International - Industry Reports—Established in 1984, Business Monitor International is a leading online publisher of specialist business information on global emerging markets. Business Monitor's range of quarterly services covers political risk, finance, macroeconomic performance, outlook and forecast, industry sectors and the business operating environment. Each Industry Report has been researched at source, and features latest-available data covering production, sales, imports and exports; 5-year industry forecasts through end-2012; company rankings and competitive landscapes for multinational and local manufacturers and suppliers; and analysis of latest industry developments, trends and regulatory changes.

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Business Monitor International - Industry Reports. "United Kingdom Freight Transport and Shipping Report 2016" Sep 24, 2016. Alacra Store. Oct 23, 2016. <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/United-Kingdom-Freight-Transport-and-Shipping-Report-2016-2026-2008>
Business Monitor International - Industry Reports. (2016). United Kingdom Freight Transport and Shipping Report 2016 Sep 24, 2016. New York, NY: Alacra Store. Retrieved Oct 23, 2016 from <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/United-Kingdom-Freight-Transport-and-Shipping-Report-2016-2026-2008>
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