According to New Research from the Economist Intelligence Unit and American Express
Forty-three percent expect trade to increase by more than 10% over the next five years
NEW YORK, August 16, 2016 — Global companies are positive about plans for future trade activity with the U.S., according to new research conducted by the Economist Intelligence Unit on behalf of American Express. The research found that two-thirds of survey respondents (66%) anticipate that their company’s trade with the U.S. will increase over the next five years and more than four-in-ten (43%) expect an increase of more than 10%.
The research, entitled Terms of Trade: Understanding Trade Dynamics in the U.S., is a survey of 531 executives at companies worldwide examining global trading relationships, looking at how companies trade, the challenges they face and how they expect international trade with the U.S. to change based on recent trends.
While opportunities for trade abound, international trade is not without difficulties. Companies trading with the U.S. face a number of challenges to navigate. Exchange-rate volatility presents the largest issue for companies, with more than four-in-ten respondents (41%) citing this as a concern. Nearly one-third of respondents cite transport costs and delays, trade-related infrastructure and making payments as their top challenges (32%, each).
The survey catalogued payment-related challenges to international trade, including: currency fluctuation (61%), which caused the greatest challenge, process inefficiencies and limited payment visibility (each, 52%), bank fees (51%), and limited or no terms (50%) and banking hours (50%).
“Optimism about the outlook for global trade presents opportunities for U.S. businesses looking to export internationally,” said Guillermo Brenes, Vice President of Global Currency Solutions at American Express. “The survey shows that a number of the challenges to international trade are within the span of a company’s control, so there are practical ways in which companies can improve upon their own trade experience.”
Quality of U.S. Trade-related Infrastructure Ranks High
Survey respondents gave high marks on the overall quality of trade-related infrastructure in the U.S. Over two-thirds of survey respondents (69%) rate the U.S. infrastructure as “very good” or “excellent,” and only 2% consider it to be “poor.” The trade-related infrastructure companies rely on most includes:
- Digital communication technology (42%)
- Port facilities (31%)
- Road network (26%)
- Cold transport and storage facilities (25%)
- Warehousing (26%)
- Rail network (16%)
- Air links (13%)
- Other specialized transport and storage (7%)
The findings are based on an executive survey of 531 companies that trade with the US, conducted by The EIU in March and April 2016, as well as desk research and interviews with experts.
The survey sample is global, spanning Asia-Pacific (49%), Europe (22%), North America (19%) and South America (9%). Nearly half of those surveyed are C-level executives, and another 40% hold senior executive positions (SVP, VP, director, head of business unit, head of department). The firms in the survey are split almost evenly between those with an annual revenue of US$250m-500m and those with US$500m-1bn in annual revenue. Of the 23 sectors covered, the best-represented are financial services, manufacturing, consumer goods and services, IT and retail.
About The Economist Intelligence Unit
The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.
About American Express Global Commercial Payments
Through its Global Commercial Payments division, American Express offers a suite of payment and lending products that help businesses and organizations of all sizes gain financial savings, control and efficiency. Global Commercial Payments provides solutions for travel and everyday business spending, cross border payments, global currency solutions, and business financing.
To learn more about Global Commercial Payments visit business.americanexpress.com.
About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress,foursquare.com/americanexpress, linkedin.com/company/american-express,twitter.com/americanexpress, and youtube.com/americanexpress.
SOURCE: American Express