Importers: Expect us to buy more in 2013 [SURVEY]

Posted: January 23, 2013

Oceania buyers most optimistic; US importers lean toward reshoring.

Volume buyers plan to boost overseas orders in 2013 despite rising prices and end-market demand uncertainty.

More than 80 percent of the 700 importers surveyed by Global Sources said they expect order volume this year to exceed 2012 purchases. Only 5 percent will be reducing imports. These results surpass the confidence buyers displayed in a 2H 2012 survey. At that time, two-thirds of respondents said they will raise order volume.

This year, the increase in imports will primarily be between 10 and 20 percent. China suppliers anticipated as much, pegging growth within the same range in a separate survey also conducted by Global Sources.

When broken down by location, respondents in Oceania are the most aggressive with their expansion plans. Buyers there are braver with projections as robust economies, including New Zealand’s and Australia's, help encourage domestic consumption.

Both countries have major trade partnerships with China. In 2011, China overtook Australia as the largest source of New Zealand imports. Australia's import/export transactions with China, meanwhile, hit $105 billion in 2010. This marked the first time that Australia’s two-way trade with a single country broke the $100 billion mark.

On the flip side, more Europe and South America respondents are looking at just sustaining current imports. Some are even planning reductions. Buyers in Europe are naturally more watchful in light of the debt crisis, while South America importers are cutting back after years of rapid development.

2013 will also see volume buyers extending sourcing options beyond their go-to hub China. Transactions, however, will continue to be primarily Asia-centric. Nearly 12 percent will remain loyal to their overseas partners.

For respondents, India, Thailand, Vietnam and Indonesia are the top four alternatives. The US appears at number 7, possibly a reaction to the reshoring trend.

Categorizing responses by region supports the last observation. Together with importers from Africa and the Middle East, North America buyers are the top proponents of insourcing. For each location, roughly two-thirds said they plan to procure more from manufacturers in their home countries.

Further, buyers faced with high production and shipping rates, and import tariffs and fees from their usual overseas hubs have particularly strong plans to purchase domestically. Doing so makes it easier for respondents to meet expansion plans for 2013.

This growing emphasis on insourcing is a reverse of survey findings in the second half of 2012. At that time, buyers said they will maintain or boost purchases from China.

With regard to challenges, survey respondents across locations save for Africa and Oceania listed rising China prices as their biggest sourcing impediment this year. Well aware of their customers’ reservations, China exporters continue to improve manufacturing efficiency and lower production costs to keep quotes in check. Makers are also boosting quality and expanding selections to retain their client base.

Africa buyers are most concerned over financial credit that would enable them to pay for their imports. On the other hand, related end-market issues are the primary challenges Oceania buyers are facing this year. Because markets there are small, competition to attract retail orders is heightened.

About one-third of surveyed buyers are considering employing the yuan to settle some or all of their transactions with China.