Connecticut companies exported $14.4 billion in goods and services in 2016, comprising 1.5% of total U.S. exports, according to a new survey released today, the first day of Export Week.
CBIA’s sixth biennial International Trade Survey of Connecticut Businesses provides a comprehensive look at the state’s current exporting environment, barriers to growth, and the risks and rewards for businesses entering the international market.
More than three-quarters of surveyed companies (77%) are engaged in international trade, and most of those are veterans of the global marketplace, with an average of 27 years exporting experience.
The largest foreign markets for Connecticut exporters are North America (73%), Western Europe (63%), and Northern Asia and the Pacific Rim—China, Japan, and Taiwan (51%). Since the 2015 survey, North America regained its position over Western Europe as the largest foreign market.
“This survey shows that there are numerous Connecticut companies with a significant part of their business dedicated to exporting,” said CBIA economist Pete Gioia.
“The challenge for the state is to encourage more businesses to get involved in exporting, as well as grow participation for occasional exporters.”
The survey found that the single greatest challenge for Connecticut exporters is government trade policy/regulation (40%), followed by international competition (23%), overall costs (20%), and cultural differences (12%).
The majority of respondents (79%) noted that state taxes are a disincentive to doing business in Connecticut. But when it comes to exporting, 70% of state exporters surveyed take advantage of the state’s R&D tax credit, 48% take the domestic production deduction, 14% utilize IC-DISC, and 38% benefit from other state tax incentives.
The survey also found:
- While 98% of respondents have websites for their goods and services, 76% acknowledge their website is not capable of processing international orders
- Connecticut’s top three export categories are transportation equipment, machinery, and computer and electronic products, sold primarily to France, Germany, and Canada
- One-third of non-exporting respondents reported they are interested in trading to foreign markets
- 36% believe involvement in international trade is possible for their businesses within the next two years
- Businesses identified lack of knowledge and experience (32%) and the costs of exporting (27%) as the biggest barriers to entry
“Clearly, the results of this year’s international trade survey continue to show that exporting is of vital importance to Connecticut's economy,” James F. Kask, a partner with survey sponsor, CohnReznick.
"To ensure the manufacturing and distribution industry continues as a mainstay, Industry 4.0 and opportunities around the Internet of Things should become a key component of a company's business strategy.”
This year’s survey is sponsored by the Connecticut Export District Council, TD Bank, and CohnReznick.
The 2017 International Trade Survey of Connecticut Businesses was emailed and mailed this survey to 3,794 Connecticut businesses with export potential in February 2017, for a response rate of 5%. The margin of error was 6.8% at a 95% confidence level.
CBIA is Connecticut's largest business organization, with thousands of member companies, small and large, representing a diverse range of industries from every part of the state. For more information, please email or call Meaghan MacDonald (860.244.1957).