Despite the increasing protectionism triggered by Brexit and the election of Donald Trump, much of the news in 2017 is more likely to be good than bad, with Asia set for moderate to better-than-expected global growth this year, according to Voice of Asia, a new report published by Deloitte University Press, a unit of Deloitte.

The sub-index for new export orders across Asia in the Purchasing Managers’ Index (PMI), are already on the rebound. This means that China, as well as other export-oriented economies in the region, and outsourcing centres, will continue to benefit from this trend in 2017.

Although world trade volumes have been in the doldrums for many years, there are very early signs that US import demand is picking up. The leading indicators of world trade show that a gathering rebound is under way.

Since May 2016, new export orders have been rising steadily, posting a 51% increase in August 2016, reflecting a trend seen in PMIs around the world. This burgeoning export recovery is supported by a rise in new export orders received by all sectors of the global economy. Moreover, export orders received by Taiwan, a bellwether for world trade, are looking healthy, while factory orders in Germany, another major global exporter, are also on the rise.

Trade in electronics components, another key lead indicator of world trade, is also improving based on rising new US orders for computer and electronic parts. This also points to growth in Asia’s manufactured exports.

Container throughput, another leading indicator, is also recovering with a 3% growth from July 2015 to January 2016.

Air freight, which also provides a gauge of future trade activity, is showing signs of life too. In fact, the growth of global air freight has accelerated to its strongest rate since early 2015.

Export-oriented newly industrialized economies, particularly Taiwan, which benefits from its strong linkages to US technology products, should benefit. However, the strength of its recovery will also depend on how much of a turnaround there is in Chinese demand for Taiwan-made intermediate products.

South Korea is also expected to benefit, particularly if there is a rebound in global capital spending. However, the rebound will be constrained by sector-specific challenges in its shipbuilding, shipping, and phone sectors.

Export-oriented Asean economies also stand to gain, particularly Malaysia, which has a competitive currency and a strong base of export-oriented manufacturing, as well as Thailand and Vietnam.

Outsourcing centres, particularly India and the Philippines, will also
continue to gain as outsourcing is strengthening despite the US election-related rhetoric around this topic.

India’s outsourcing industry remains dominant in the region, and has morphed into a broader ecosystem integrating voice support along with sales support and software development. Given advances in the technological domain, and the need to maintain profitability, the outsourcing industry is likely to continue showing impressive growth for both India and the Philippines.

China is an obvious beneficiary from increased demand in the G3, but it is facing more protectionist barriers and some Trump-related question marks.

India’s manufacturers remain less geared to a pickup in G3 demand, but nonetheless will be positively affected by a recovery in key export markets. Further, India’s manufacturers have considerable potential to sell into newer markets, and are already targeting African and Latin American countries, according to Deloitte.