HONG KONG -- (BUSINESS WIRE) --
Despite a slowing economy, China is the top spot for future growth of U.S. companies, according to the latest Wells Fargo International Business Indicator. According to 23 percent of survey respondents, China – along with Canada – is the most important country today for U.S. companies with international business, with Mexico (20 percent) and Western Europe (19 percent) rounding out the top four. In addition, as they look ahead two to three years, 25 percent of U.S. companies are watching China as a “hot spot” for their future growth, followed closely by Mexico (22 percent), Brazil and India (each 13 percent).
Released today by Wells Fargo’s International Group, part of Wells Fargo & Company (NYSE: WFC), the Wells Fargo International Business Indicator tracks the strength and direction of the international outlook of U.S. companies. The survey included more than 250 U.S. companies with $50 million or more in annual revenue that conduct at least some international business.
“Many survey respondents cited China’s rising purchasing power when placing it at the top of their list,” said John Rindlaub, based in Hong Kong and regional president for Wells Fargo Asia Pacific. “As U.S. companies look to expand internationally, it’s clear that many view China as a vital economic partner for long-term growth. Wells Fargo continues to see interest among U.S. companies wanting to do business in Asia, especially in China, and we expect that to increase in the coming years.”
Additional Indicator Findings
Expectations cool for short-term international activity
Thirty nine percent of the U.S. companies surveyed expect to see an increase in profits from their international business in 2015, compared to 51 percent in 2014. Similarly, only 30 percent expect to see an increase in the volume of exports in 2015, compared to 50 percent in 2014. Despite dampened short-term expectations, however, a majority of companies are still bullish on future international business, with 80 percent agreeing that U.S. companies should consider expanding internationally for long-term growth.
Continuing in positive territory for the second consecutive year, the 2015 Wells Fargo Business Indictor score fell five points from 68 in 2014 to 63 in 2015, indicating dampened short-term expectations for international activity. U.S. companies are less positive about the global business outlook in 2015, with only 37 percent of those companies surveyed seeing the global business climate improving this year. As a result, fewer companies expect to grow their international business this year, with 54 percent planning to increase activity in 2015, compared to 69 percent in 2014.
U.S. companies see long-term value in international expansion
While short-term international expectations have cooled, U.S. companies still remain confident about the future global marketplace. Recognizing long-term value in international expansion, a majority (60 percent) of U.S. companies surveyed expect to increase international business development planning in 2015. Additionally, half (49 percent) believe business outside the U.S. will be increasingly important to their company’s overall financial success in the coming year.
“The Indicator results reflect what we’re seeing in the marketplace and hearing from our customers,” said Sanjiv Sanghvi, head of Wells Fargo Global Banking. “Continued concern about global economic conditions, the value of the U.S. dollar and the effects on exports, are impacting short-term international business activity. However, while the near-term outlook has softened, U.S. companies highly value international markets for future business development potential, and we continue to see U.S. companies investing in the global marketplace as they plan for long-term growth.”
For more information on the Wells Fargo Indicator, including a complete report of the findings and a video overview with Sanjiv Sanghvi, visit https://www.wellsfargo.com/indicator
About the Wells Fargo International Business Indicator
On behalf of Wells Fargo, global research firm GfK conducted 253 telephone interviews between December 12, 2014 and February 6, 2015 with executives at U.S. companies with $50 million or more in annual revenue that conduct business internationally. Additionally, participants had to be associate vice president/director level or above, with either direct decision-making or some influence over the company’s international business plans and/or strategies. The margin of error on the total is +/-7.9 percentage points at the 95% confidence level.
The International Business Indicator score represents the average of responses for two questions regarding the level of importance and activity that U.S. companies expect from their international business in the next 12 months. The Indicator score ranges from zero to 100, where 100 indicates an absolute positive outlook, 50 indicates a neutral outlook, and zero indicates an absolute negative outlook.
About Wells Fargo & Company
Wells Fargo operates from 36 countries, including branches in the Cayman Islands, Dubai International Financial Center (DIFC), Hong Kong, London, Seoul, Shanghai, Singapore, Taipei, Tokyo and Toronto. The company provides middle market businesses, corporations, financial institutions, and multilateral organizations with a wide range of international solutions.
Wells Fargo & Company (NYSE:WFC) is a nationwide, diversified, community-based financial services company with $1.6 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 locations, 12,500 ATMs, and the internet (wellsfargo.com), and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2014 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.
About GFK
GfK is one of the world’s largest research companies, with more than 13,000 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. In 2014, GfK’s sales amounted to €1.45 billion. To find out more, visit www.gfk.com.
CONTACT:
Wells Fargo & Company
Kathryn Ellis, 1-415-222-3767
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@KatieEllisWF