(Reuters)
- Most U.S. high-tech companies expect to export
more cell phones, tablets and other electronics over the next two years to
growing middle-class populations in developing nations, citingfree trade pacts and
rising labor costs abroad, a survey found.
About 85
percent of U.S. high-tech executives polled said the Obama administration was
somewhat or very likely to meet its goal of doubling exports by 2015. Just 40
percent of executives were as optimistic two years ago after the export target
was set.
The third
annual survey was conducted by IDC Manufacturing Insights for United Parcel Service,
the world's largest package delivery company.
"It's
really being driven by this emerging middle class that have more disposable
income and a heavy appetite for technology products like cell phones, tablets
and laptops," Ken Rankin, high-tech marketing director at UPS in
Atlanta, said in a Friday interview with Reuters.
Scott Davis,
UPS chief executive officer, is on the President's Export Council and has
touted free
trade agreements as
critical for boosting U.S. exports and the economy.
A free trade
agreement between the United States and Panama will soon go into effect, U.S.
Trade Representative Ron Kirk said on Friday. The U.S.-Colombian agreement went
into force in July, after the U.S.-South Korea pact in March.
Only 23
percent of the companies said they had export growth over the past two years,
but 74 percent now expect to export more over the next two years, Rankin said.
"Despite
all of the short-term talk of economic weakness and the dreaded fiscal cliff,
the high-techexecutives that we talked to really had a bullish
outlook in the next two to five years when it comes to export growth for their
products," he added.
The fiscal
cliff refers to the year-end deadline for about $500 billion in expiring U.S.
tax cuts and automatic spending cuts set for next year unless Congress can
compromise over lowering the budget deficit.
The survey
of 125 high-tech manufacturers included senior supply chain and logistics
executives in consumer electronics, semiconductor, communications equipment and
electronic component/accessories industries.
High-tech
product sales and shipments are expected to grow the most, by 22 percent, in
India, the Middle East and Africa, over the next three to five years, the
survey said.
Increases
are expected to range from 18 percent in Brazil and 19 percent in the rest of
South America to 15 percent in Eastern Europe, 13 percent in Korea and 8
percent in China and in other Asian nations.
Lingering
barriers to boosting exports include the difficulty of managing spread-out
global inventory, unstable global suppliers and security concerns, the survey
found.
"Additional
progress in free trade agreements would be a big winner, not only for the
high-tech space but for all U.S. industry," Rankin said.
The
high-tech companies that were surveyed sell and ship 97 percent of their
products in North America. Within three to five years, that percentage will
decline to 90 percent as demand mounts in emerging markets for their products.
"Winners
will be those companies that successfully leverage the emerging market growth
with strong products and executive import/export excellence," said Rankin.
As for
moving the goods, 70 percent of the executives said they are planning to modify
their distribution networks to handle more volume at East Coast ports once a
wider Panama Canal is opened to bigger ships around 2015.
More than one-third
of those polled said they planned to shift from air to ocean freight when that
happens.
In
anticipation, East Coast ports are heavily investing in dredging and other
projects to be able to accept bigger ships.
Companies
such as Federal Express and UPS have already seen a shift in demand for
shipping products more cheaply, such as by sea, rather than premium-priced
express air services, because of the weakening global economy.
(Editing by
Prudence Crowther)
