The great recession drove many companies to look for sales overseas. A new survey of Connecticut companies shows that half of those responding said exports helped them weather the downturn. Now, domestic markets are looking up, but those firms still want to diversify across the world.
The optimism is palpable as exporters, trade officials and bankers discuss ways to expand overseas. A Connecticut Business & Industry Association survey of nearly 1,200 Connecticut companies, found the majority are engaged in exporting –an increase of 36 percentage points from 2007. CBIA economist Peter Gioia.
“The companies that are exporting are exporting even more than they were before. Second, exporters are looking at different markets. There is likely to be a shift from Europe and North America towards more Asian opportunities and Latin America.”
In three years, exporters expect to decrease their presence in Canada, Mexico and Western Europe, and increase their sales in Northern Asia and the Pacific Rim; Southern Asia and South America. Though economic growth has dipped in foreign markets as well, there is strong domestic demand as those countries try to catch up with developed economies. Because of the market shift, there will be new challenges. Survey respondents cited many risks – among them, loss of intellectual property and getting paid overseas. Peter Pfeiffer, business development manager at McGladrey.
“I see it more of an opportunity than a risk. They faced the same risk when they started exporting to other countries in North America and South America. The risk really is more an opportunity to understand how to deal with that and that give them the competitive advantage they need to get a first-mover’s advantage in those particular markets.”
Twenty six percent of respondents said they have facilities abroad and 31 percent have employees outside the U.S., so they can be closer to major customers and suppliers. And that brings with it new problems including dealing with many different bureaucracies.
“I think it gets back to leadership of the organization to develop a relationship with those service companies that they have trust with, to help identify the opportunities, to help execute on that opportunities and hold each other accountable to the metrics they put in place to address the compliance issues.”
Laura Jaworski from the state Department of Economic and Community Development, says all this feedback is helping to develop the department’s outreach strategy for exporters.
“We actually use the survey responses to help shape our programs, events and informational sessions and I know my colleagues at the Department of Commerce do the same. It really helps shape our strategy into what do the companies need to know, and where do they want to go. China is obviously a market that keeps coming up, of great interest. Companies see the most growth happening there.”
Connecticut companies can apply for a federal grant from the DECD of up to $10,000 by June 30 to grow their exports in existing and new markets.