Exporting is an integral part of many Connecticut businesses, and more companies are doing business abroad in order to remain competitive in today’s global marketplace.
The benefits include increasing revenues, developing a new customer base, helping businesses weather the recession, and better positioning companies for a stronger recovery.
According to the Connecticut Business & Industry Association’s 2011 International Trade Survey, more businesses are entering the foreign marketplace. Sixty percent of respondents now export goods or services.
That’s up 25 percentage points since 2007, when only about one-third of Connecticut companies surveyed were engaged in international trade.
The majority of respondents (83 percent) said the main reason for entering the global marketplace, was to increase sales and profits.
This is up from 64 percent whose goal was to increase sales and profits in 2009. More than half (56 percent) of respondents said their exporting activities have helped them survive the recession, and 26 percent reported the economic conditions had no effect on their business abroad.
“Our world is increasingly complex and ever-changing with respect to foreign trade,” said Frank P. Longobardi, CPA, managing partner, J.H. Cohn LLP Glastonbury office.
“However, the past years have developed an experience and focus in the market that allow even the smallest company to effectively analyze and implement global sourcing and sales strategies.”
Connecticut exports have steadily grown. The latest figures show that 5,215 Connecticut companies (90 percent are small to midsize) are exporting goods and services to 197 foreign countries. These top markets are:
- Western Europe (27 percent)
- Northern Asia and Pacific Rim – China, Japan and Taiwan (26 percent)
- North America – Canada and Mexico (25 percent)
Thirty percent of respondents believe that Northern Asia and the Pacific Rim will be the greatest emerging market in the next three years, followed by Western Europe (19 percent), Southern Asia (15 percent), North America (14 percent), and Eastern Europe (7 percent).
“Exports sustain and create jobs,” said Laura Jaworski, International Division of the Connecticut Department of Economic and Community Development.
“Given that 95 percent of the world’s consumers live outside the U.S., it makes sense to pursue foreign business opportunities to reach those consumers, create jobs here, and spur economic growth and recovery.”
While the survey finds Connecticut firms are active in global trade, one quarter of the companies not involved in exporting said a lack the knowledge about foreign markets is their greatest barrier to entering the global marketplace.
The survey, sponsored by J.H. Cohn LLP and HSBC Bank USA National Association, in partnership with CBIA, DECD, and the U.S. Department of Commerce Export Assistance Center, explores the benefits and challenges Connecticut companies encounter in international trade.
The survey was emailed to businesses across Connecticut in late March 2011. A total of 441 companies responded. The margin of error is +/- 4.7 percent.