Politicians may be reshaping global supply chains, but businesses are still confident they will find growth in new markets, according to a new HSBC report, and the Bank’s Head of Commercial Banking in the Channel Islands and Isle of Man believes the islands’ global reputations and digital strengths make them well placed to support this growth.
The latest HSBC ‘Navigator: Now, next and how’ survey of over 9,100 companies in 35 countries and territories finds that 47% are more optimistic now than in 2018, with 79% expecting their sales to rise over the next 12 months.
Four in five (81%) are positive in their outlook for cross-border commerce, up four percentage points on last year, even as 65% think governments are adopting increasingly protectionist trade policies.
International expansion is seen as the top growth driver by bullish firms (38%) as well as being a defensive reaction to new threats (29%). Entering new markets is the joint top change businesses plan to make to their supply chains over the next three years, up five points year-on-year to 28% of respondents, alongside increasing use of digital technology.
Continuing a trend seen in 2018’s survey, most markets are planning to boost their intra-regional trade in the coming three to five years. Europe looks set to become a bright spot in inter-regional trade though, with 39% of companies naming a European market in their top three for business expansion in the next three to five years, up six points from a year ago.
Warwick Long, Head of Commercial Banking, HSBC Channel Islands and Isle of Man, said:
“Businesses are responding to changes in the political landscape, whether it’s new tariffs that disrupt supply chains or trade agreements that smooth a path to new markets. They are investing in digitisation and looking to seize market share as a means to protect and grow their business.
“These findings should resonate clearly with firms in Guernsey, Jersey and the Isle of Man, as jurisdictions that have robust global strategies as international finance centres with strong reputations in key markets in Asia, the Middle East and the US and that are positioned really well as gateways to Europe. In addition, they all have ambitious digital strategies at a jurisdictional level, and we are seeing huge amounts of innovation in terms of how firms in the islands are implementing technology to support global growth. If they can maintain and assert these strengths, then all this combined means that the islands should be positioned strongly to seize the opportunities this report highlights.”