(Source: Business Wire)
HSBC Bank USA, N.A. announced today the results of its second annual survey of U.S. mid-sized companies, a vital yet under-researched segment of the U.S. economy accounting for nearly US$6 trillion in annual sales.*1 The poll of 500 senior financial executives from companies with annual sales between US$20 million and US$5 billion focused on the opportunities and challenges they face when operating in multiple markets worldwide either by selling or sourcing goods and services.
HSBC's U.S. Survey on International Business found that the portion of executives planning to increase their overseas sales targets rose from 49% in 2008 to 56% in 2009, underscoring continued interest for global expansion even during the midst of worldwide economic challenges. Once again, emerging markets stood out for their appeal to US businesses, with China, India and Brazil ranking as the top three most attractive markets for the second consecutive year.
However, the survey also notes that growth in U.S. companies' overseas revenue has slowed significantly, with only 52% of corporate financial executives saying international sales are outpacing domestic sales, compared to 67% a year prior.
"While overseas sales growth has slowed in the face of current economic conditions, U.S. executives remain fully committed to long-term global expansion," said Christopher P. Davies, senior executive vice president and head of commercial banking for HSBC - North America.
Anecdotes from the survey respondents show how companies are adjusting to the economic headwinds to maintain their global growth. One respondent is increasing his company's presence in smaller markets to avoid the risk of exposure to a single large market. Another is watching exchange rates more often to ensure that her company gets the best rate when transferring money abroad.
The optimism for overseas markets persists in the face of lingering effects of the market downturn. The survey found that 43% are increasing communication with bankers to maintain access to existing credit lines. Nearly one-third (30%) said they are concerned or very concerned about the solvency and reliability of overseas customers. Many are tightening their own credit policies when dealing with partners: nearly half of respondents (48%) are more actively collecting receivables; 40% imposing stricter credit policies with customers.
As one survey respondent noted: "New customers are given smaller credit limits and receive no new merchandise until previous invoices are paid."
Additional findings from HSBC's U.S.
