Visit Our Sponsors
A new International Business Survey, released by HSBC's Commercial Banking division, finds that U.S. mid-sized companies, much like their large-cap brethren, are increasingly pinning their growth plans on markets overseas even as the U.S. economic recovery slowly takes hold. The U.S. component of the survey, conducted for the third year, polled nearly 650 U.S. senior financial executives from companies with annual sales between $20m and $5bn, a critical segment of the U.S. economy accounting for nearly $8.2tr in annual sales.
HSBC's International Business Survey found that the portion of U.S. executives planning to increase their overseas sales targets rose sharply to a survey high of 72 percent, up from 49 percent in 2008 and 56 percent in 2009, underscoring the rapid globalization of the core of America's economy. Fifty-six percent of the executives polled say their overseas sales are growing faster than domestic sales, a rebound from 52 percent last year though still below the 67 percent level seen in 2008.
Surprisingly, respondents indicated the most attractive countries for U.S. companies to do business with currently are Canada and the United Kingdom, which surpassed some of America's largest trading partners, including China, Germany and Japan. Forty-five percent of respondents cited Canada and 38 percent the UK as their top market for cross-border business; outpacing other dynamic emerging markets like India and Brazil.
However, when it comes to long-term prospects, China still carries the day. Forty-five percent of respondents chose China as the country with the greatest growth potential for U.S. mid-sized businesses. India and Canada were in a statistical tie, polling 27 percent and 26 percent, respectively. In 2008 and 2009, the markets that offered the greatest growth potential were China, India and Brazil.
As the economy shows signs of life, more mid-sized businesses are investing in growth initiatives to maintain their competitive edge, rather than cutting costs and taking measures to brace for a downturn. This year, less than one-third of respondents (30 percent) indicated that they are reducing the number of employees at their companies, down from the nearly half (49 percent) of respondents that reported staff reductions in the previous year.
"The survey findings validate the untold story of the U.S. economy that we see every day; mid-sized businesses at the heart of the U.S. economy are increasingly adding cross-border trade to their growth plans," says Christopher P. Davies, senior executive vice president and head of commercial banking for HSBC - North America. "But the fact that many businesses currently find the greatest opportunities in established markets like Canada and the United Kingdom suggests that the challenges to tapping high-growth emerging markets remain high."
Read Full Article
Enjoy curated articles directly to your inbox.