The United States is a preferred destination for foreign manufacturers
While manufacturers around the world still rely primarily on domestic revenue to drive growth, by the end of this year, the majority of respondents to the 2015 RSM Manufacturing & Distribution Monitor survey will be selling products and services outside of their home country.
Non-U.S. companies, in fact, are showing more appetite for pursuing new international markets than their U.S. counterparts (see Figure 1).
"This appetite may be due to the size and location of a company's home market," says Steve Menaker, a partner with RSM, "but it also reflects a growing willingness among companies to pursue opportunities globally, and the challenge of achieving top-line growth is more difficult due to both global and local economic and political issues."
Favorable interest and exchange rates, energy costs and other factors are making the United States a preferred destination for foreign capital. That's great news for the U.S. economy, but not always great news for U.S. businesses. Foreign competitors hungry for a bigger slice of the world's biggest economy are investing in U.S.-based operations, taking advantage of favorable conditions to grab a share of the market.
These are some of the findings from the 2015 Monitor and the insights of RSM's professionals regarding the issues and strategies driving global growth for middle-market companies. Participants were primarily C-level executives, of whom 65 percent represent companies based in the United States, with the remainder from companies based throughout Asia, Europe, Brazil, Canada and Mexico.
Investment into U.S. market likely to increase
Given the strong economic position held by the United States, foreign investment is likely to increase, possibly sharply. The results from the 2015 Monitor agree-47 percent of non-U.S. respondents already sell in the United States, 21 percent plan to start this year and 27 percent see the United States as the market where they expect to see the biggest increase in sales in 2015.
Among non-U.S. respondents, 67 percent are confident that they can increase sales in nondomestic markets. Yet more than 90 percent of U.S. respondents are confident in their ability to defend their U.S. market share. Something has to give.
The 2015 RSM Manufacturing & Distribution Monitor was conducted using an online questionnaire promoted by RSM, industry associations, and a research panel organization to manufacturing and distribution companies. There were 1,660 total valid respondents to the 2015 Monitor survey, with completed questionnaires received in March and April 2015. Responses were received by The MPI Group, an independent research firm, and then entered into a database, edited and cleansed where necessary to ensure answers were plausible. All respondent answers to the 2015 RSM Manufacturing & Distribution Monitor survey are confidential. As an incentive to complete the study, participants that provided contact information are being provided a customized benchmark report.
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