Businesses are optimistic about their trading prospects, despite many believing that protectionism is on the rise, an HSBC survey has found.
A clear majority of companies (78 per cent) are upbeat about the trading environment, encouraged by increasing customer demand and favourable economic conditions, according to the poll of more than 8,500 businesses around the world.
Yet against a backdrop of global trade tensions, some are changing their approach to achieve growth, such as by focusing on trade with markets closer to home.
Companies are increasingly prioritising trade within their own geographic region
Noel Quinn, Chief Executive, Global Commercial Banking, HSBC, said: “Businesses are staying positive, but they’re signalling to policymakers that protectionism is a significant concern that’s reducing their appetite to grow through international trade. Some are looking closer to home for opportunities, and many are adapting their approach to stay fit for the future.”
In today’s geopolitical climate – with 63 per cent of firms saying that governments are becoming more protective of their home economies – companies are increasingly prioritising trade within their own geographic region, the poll found.
For example, 38 per cent of North American companies plan to trade within their home region in the next three to five years, compared with 33 per cent in a previous HSBC survey conducted in March. When asked about their top targets for future trade growth, 15 per cent of North American firms cited Asia, down from 33 per cent in March.
Similarly, the proportion of European companies focusing on Asia as the most promising area for future growth has halved since the March survey, falling to 13 per cent from 26 per cent.
A number of businesses are also looking to technology to drive efficiency and create new opportunities, with 32 per cent of firms expecting this to be their biggest source of growth in the next year.
Mr Quinn added: “We expect technology, digitisation and data to play an increasingly important strategic role by enabling businesses to develop their products and services, reach new customers and cut costs by improving operational efficiency.”
The findings are taken from a new report called Navigator: Now, next and how for business. Commissioned by HSBC Commercial Banking, it examines business sentiment towards trade and growth in 34 countries and territories around the world, including China, the UK and the US.
Read the full report on the HSBC Commercial Banking website.