Small Exporters Are Seeing a Slowdown, Survey Says

    By | Small Business

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    Export volume has grown, but is stagnating, for small exporting firms, The 2016 Small Business Exporting Survey found.

    The survey of 530 owners of businesses with fewer than 500 employees was conducted by the Small Business Exporters Association, the international trade arm of the National Small Business Association. Most businesses surveyed also had gross sales or revenues under $5 million, total assets under $5 million, and payroll under $1 million last year, and had been in business more than 10 years.

    More than half of those surveyed (58%) claimed to have sold merchandise or services to a customer outside of the U.S. Of those, just 39 percent said their export volumes are increasing, a significant drop from the 52 percent who said so in 2013.

    SBEA says the slowdown is “likely due to a more stable U.S. economy and stronger U.S. dollar, as well as overseas market volatilities.” Nearly half of those exporting firms said less than 10 percent of their sales are from exporting; one-third said that between 10 and 50 percent of their overall sales are exports.

    Canada, Mexico, UK, and China represent the top 4 markets among survey respondents with exporting experience, who told SBEA that they are driven to export to increase sales and profits, but that their top challenge is getting paid. They cited North America, Northern Asia/Pacific Rim, and South America as the regions that hold the most potential for their future business. Asked if they employ or operate facilities outside of the U.S., 84 percent of small exporters said “no.”

    Of the 42 percent of respondents with no exporting experience, the top reason cited for not exporting is “a lack of goods and services that could be exported.” But about half said they would be interested in exporting if their concerns could be addressed – namely, how to get started, how to get paid, how to comply with regulations, and how to handle the complexity of exporting.

    Despite what SBEA calls “a concerted effort by the administration, Congress and regulators to improve and enhance exporting opportunities for small businesses” in the past few years, the organization says “more can and should be done.”

    SBEA said its survey found that most non-exporting small firms recognize the Small Business Development Centers, SBA export lending programs, and U.S. Department of Commerce export programs as go-to resources for exporting. Among exporting firms, only 5 percent report being hurt by free trade agreements. Instead, benefits of free trade agreements cited by respondents include access to new foreign markets and opportunities to expand existing export operations. Asked what types of federal government support would be most beneficial to their exporting business, respondents cited export tax incentives, enhanced technical assistance, and a competitive U.S. dollar exchange.

    For complete results, see the The 2016 Small Business Exporting Survey.

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