A survey of senior executives involved in their firms’ international trade decisions and transactions has shown widespread optimism for trade bouncing back in the wake of coronavirus. The study, commissioned by DP World and conducted by The Economist Intelligence Unit, found that 70 per cent of businesses predict trade will recover to pre-pandemic levels more quickly than recovery after the financial crisis of 2008, which took more than two years. Nearly a third thought the recovery would be twice as fast, with trade returning to pre-pandemic levels within a year.
The data also showed that the pandemic has brought lasting change to the way companies do business. Around 83 per cent of executives indicated that they are in the process of reconfiguring their supply chains by switching or adding new suppliers, using different logistics providers and/or changing production or purchasing locations.
During the early stages of the pandemic, shutdowns and disruption to production exposed vulnerabilities such as over-dependency on single geographies and a lack of transparency on the movement of cargo. Many of the world’s major economies were in lockdowns of varying severity, international travel had come to an almost complete stop and supply chains for essential goods were complicated by demand and supply shocks they were not prepared for.
Yet despite the widespread economic impact of the pandemic, 42 per cent of respondents stated that their firm’s international revenues expanded in the first half of 2020. Some 19 per cent reported no change from the previous year. These figures are encouraging at a time when only one of the world’s major economies, China, is registering economic growth.
Sultan Ahmed Bin Sulayem, CEO and Chairman of DP World, said: “The effects of the pandemic have accelerated the transformation of the supply chains and prompted rapid adaptation to ensure resiliency in international trade. The global business community has risen to the challenge and taken strong and decisive action to make supply chains more robust and agile, the benefits of which will be reaped in future years.”