U.S. international outlook softens, but 2015
International Business Indicator shows U.S. companies optimistic
about long-term international growth – especially in locations
including Western Europe
Many U.S. companies, especially larger businesses, look to
Western Europe when expanding internationally, according to the
latest Wells Fargo International Business Indicator. Larger
companies – those with $500 million or more in annual revenue –
view Western Europe as one of the most important markets, according
to 30 percent of survey respondents. When looking at all U.S.
companies with international exposure and revenue of at least $50
million, Western Europe is the fourth most important, according to
19 percent of survey respondents, following China and Canada (both
23 percent) and Mexico (20 percent).
Released today by the International Group 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, surveying more than 250 U.S. companies
with annual revenue of $50 million or more that conduct at least
some international business
“Many survey respondents cited improving economic conditions and
a strong workforce when placing Western Europe at the top of their
list,” said Jim Johnston, based in London and head of Wells Fargo’s
European operations. “As U.S. companies expand internationally,
they clearly view Western Europe as a key partner for long-term
growth. We continue to see more U.S. companies wanting to do
business throughout the region and expect that trend to continue in
the coming year.”
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,
down from 51 percent in 2014. Similarly, only 30 percent expect to
see exports increase in 2015, compared to 50 percent in 2014.
However, despite dampened short-term expectations, a majority of
companies remain 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 overall 2015 Wells Fargo Business Indictor score fell
five points from 68 in 2014 to 63 in 2015, reflecting the dampened
short-term outlook. Only 37 percent of U.S. companies participating
in the Indicator survey said they see the global business climate
improving this year. As a result, only 54 percent of companies
surveyed said they plan to increase activity in 2015, a decline
from 69 percent in 2014.
U.S. companies see long-term value in international
expansion
U.S. companies remain confident about the future of the global
marketplace. A majority of survey respondents (60 percent) expect
to increase international business development planning in 2015.
Additionally, nearly half (49 percent) believe business outside the
U.S. will be increasingly important to their overall financial
success in the coming year.
“The latest 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, slowing growth in China, the value of the U.S.
dollar and its effect on exports, are impacting short-term
international business activity. However, while the near-term
outlook has softened, U.S. companies value international markets
for business development and we expect to continue to see them
investing in the global marketplace as they plan for long-term
growth.”
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.
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.
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 $1.7
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
8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and
mobile banking, 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.
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.
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Wells Fargo & CompanyKathryn Ellis,
1-415-222-3767kathryn.d.ellis@wellsfargo.com@KatieEllisWF
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