Supply chain trends 'shifting trade balance to Asia'

Changes in global supply chain trends are causing a shift in the worldwide trade balances from west to east, according to a new report.

Ernst & Young has published industry analysis suggesting the Asia-Pacific region will experience the fastest growth in global trade from now until 2020, with intra-regional trade leading to a concentration of international demand.

Emerging markets such as China and India are leading the resurgence in global trade following the financial crisis, with these two markets set to account for almost one-fifth of trade flows by the end of the current decade.

The analyst explained that this trend will be driven in large part by the global outsourcing of production to these areas, as well as the growth of regional supply chains to support developing economies.

Jay Nibbe, Europe, Middle East, India and Africa markets leader at Ernst & Young, added: "While the advanced economies muddle through the financial crisis, the rapid-growth markets are going from strength to strength and are an increasingly significant part of the global economy."

This comes after a report from UPS earlier this month suggested that many Asian firms are now exploring new procurement strategies to compensate for rising business costs in China.