Fifty-six percent of midsize U.S. companies operating overseas plan to boost their international revenue targets this year, according to HSBC's second annual survey. That optimism comes despite less-than-encouraging recent results: Just 52% of the respondents said their international business revenue had grown more rapidly than their domestic business revenue over the last 12 months, down 15 percentage points from the 67% who said so in last year's survey.
But Chris Davies, senior executive vice president and head of commercial banking for HSBC – North America, argues that 52% is “a positive figure.”
“The fact that even in these times of global economic pressure, companies are reaching outside of domestic markets, that's a sign of the resilience of global trade,” Davies says. He notes that for the second year in a row, the executives surveyed cited China, India and Brazil as the markets with the greatest potential for growth.
HSBC surveyed 500 senior finance executives from companies in a range of industries with annual revenues from $20 million to $5 billion. The survey shows that counterparty risk is a big consideration these days for companies with international operations, with 30% citing the solvency of their overseas customers as a major concern; 25% worried about the solvency or reliability of overseas financial partners and 22% about overseas suppliers.
The survey results also look at the many ways in which companies are responding to the recession. In addition to 62% who say they are more cost conscious and 49% who have reduced the number of employees, 48% say they're making more of an effort to collect receivables. Forty-three percent say they're communicating more with their bankers to maintain their access to credit and 40% say they're imposing stricter credit policies on customers.
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Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
