LONDON, August 10, 2016 /PRNewswire/ --
- 48% of
UK respondents anticipate that trade with U.S.
will grow by more than 10% over the next five
years
The US is a key trading partner for the majority of British
companies, according to research conducted by the Economist
Intelligence Unit on behalf of American Express.
The research, which includes a survey of 531 companies
worldwide, explores the global trading relationships, looking at
how companies trade, the challenges they face and how they expect
international trade with the US to change based on recent trends
and upcoming political and regulatory shifts.
The research found that British companies are highly optimistic
about trade growth with the US, indicating a continued strong
relationship between the US and the UK:
- Companies ranked the US as their top trading partner by
revenue, followed by domestic trade within the UK and trade with
Mexico and Canada taking joint third place
- The majority (82%) of British companies expect an increase in
trade with the U.S. over the next five years, versus the global
average of 65% of companies and a European average of 77%.
While 8% of British companies anticipate a general decline in
overseas trade over the next five years, only 2% expect trade with
the US to decrease in the same time period. Against this backdrop,
British companies were broadly satisfied with the quality of trade
related infrastructure in the U.S. and 54% of respondents stated
that trade infrastructure was either 'very good' or
'excellent'.
Jose Carvalho, Senior
Vice President of American Express Global
Commercial Payments, Europe, commented: "It is hugely
encouraging to see the US as a major trading market for British
companies, with the appetite continuing to rise year on year. Post
referendum the international playing field is even more important
and these results show that there is a clear opportunity to grow
revenue through international trade. The availability of flexible
finance solutions will be critical for companies that are looking
to grow their international trading footprint."
International trade also brings with it a number of complexities
and while the challenges in trading with the U.S. were less
pronounced than with other countries, a number of specific pain
points were identified. Globally 41% of respondents ranked exchange
rate volatility as their most significant challenge when trading
with the U.S, Meanwhile, in the UK, where the research was
conducted ahead of the UK referendum, 42% of British companies
cited exchange rate volatility as a trade barrier. While UK trade
is balanced equally between goods and services, transportation
costs and delivery delays in the US are a significant issue for 36%
of British companies who say they rely on a fairly even combination
of road, air and rail for transporting goods between the two
countries. Third in the list of challenges, and most surprising,
given the clear advantage of doing business in the same language,
was the fact that 30% of companies listed insufficient market
knowledge as a barrier to trade.
Trade regulation, an issue for the vast majority of countries
surveyed was not a significant cause for concern amongst British
businesses, and was mentioned by only 14% of respondents as a trade
pain point. However, costs associated with these changes have had a
clear impact, with 70% of UK companies saying they have seen an
increase in the cost of doing business with the US due to
trade-related regulatory and compliance activities.
The final most pronounced pain point for companies in the global
survey related to payments. 32% of respondents cited 'making
payments' as among the top challenge with issues chiefly arising
from currency fluctuation, process inefficiency, limited payment
visibility and bank fees. Within the UK making payments was
mentioned by only 26% of companies as a challenge, and 28% of
respondents said there was a shortage of external finance available
for trade with the U.S. Other obstacles to accessing finance
included 'lack of dollar liquidity' and 'high transaction costs',
which was mentioned by 20% and 16% of respondents respectively.
Study Methodology
Research was conducted ahead of the UK Referendum, between March
and May 2016, by The Economist
Intelligence Unit. The findings are based on survey of 531
companies that trade with the US Companies surveyed had revenues of
between $250million and $1billion and
it was carried out across 35 markets.
About American Express Global Commercial Payments
Through its Global Commercial Payments division, American Express
offers a suite of payment and lending products that help
businesses and organizations of all sizes gain financial savings,
control and efficiency. Global Commercial Payments provides
solutions for travel and everyday business spending, cross border
payments, global currency solutions, and business
financing.
To learn more about Global Commercial Payments visit, visit
http://www.americanexpress.co.uk/corporate.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more at
https://www.americanexpress.com/uk/ and connect with us
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