Regional supply chains are becoming increasingly important to the global economy, according to the latest Castrol Global Trade Barometer (CGTB). The Castrol Global Trade Barometer was launched last year by one of the world’s largest lubricant manufacturer and marketer Castrol, which is part of the BP group headquartered in the UK.

The CGTB is a series of reports tracking the performance and outlook of global trade based on a rolling, five-year forecast of future trade patterns. It gives the big picture view of world exports and imports, helping senior business decision makers to understand the drivers of global trade and growth opportunities across five sectors (aerospace, automotive manufacturing, industrial, marine and natural products).

“The results of this year’s barometer highlight the importance of location to economic growth. Nations such as Vietnam and Mexico are providing the supply chains that neighbouring powerhouses such as the U.S. and China demand,” said Mandhir Singh, COO at Castrol.

Places such as Vietnam, the UAE and Mexico are taking advantage of their prime locations close to large economies with strong demand for what they produce. At the same time, however, these regional trading hubs are facing mounting competition from neighbouring countries, and will need to invest in infrastructure, innovation and local trading relationships to stay ahead, the report concluded.

The CGTB is based on detailed economic modelling of investment grade trade data covering 200 countries and 10,000 sectors worldwide, interpolated from UN Comtrade, IMF, ITC and country statistical office data. Data for 20 parameters used in the forecast is taken from sources including Haver Analytics, Bloomberg, UNCTAD, WTO, IMF, ILO and the World Bank.

To view the video, click on this link.

Information on the barometer’s methodology and construction can be viewed from this link.