Despite grappling with the ongoing global pandemic, US businesses plan to boost investment over the next 12 months

Almost three quarters (74%) of US firms are more optimistic or expect business to stay the same, compared to two-thirds (67%) globally. One in 10 US companies are already ahead of pre-pandemic profitability levels and more than two-thirds (69%) expect a return to pre-COVID profitability levels by the end of next year.

US businesses remain positive as international trade is holding up. The upbeat forecast is supported by the fact that out of the US businesses that operate internationally, over two fifths (43%) have not reduced trading with any markets in the past two years. About half (51%) indicated they do not anticipate this to change over the coming 24 months. Protectionism, however, is felt strongly. Businesses’ key strategy for combating this is competing on price. North America and Europe remain the top trading partners of companies in the US, while the US itself is the top choice for companies seeking to expand internationally.

“While there is still a lot of uncertainty primarily driven by the ongoing global pandemic, US business leaders are planning ahead and adjusting their investment strategies for growth in 2021,” said Wyatt Crowell, US Head of Commercial Banking at HSBC. “Focusing on building better relationships with customers and on ensuring employee wellbeing are going to be the drivers for investment over the next 12 months.”

Future Strategy

Driven by the optimistic outlook, three quarters (75%) of US companies are projecting sales growth in the next year, a small drop from 2019 (80%) and well ahead of global respondents (64%). The biggest drivers of sales growth are expectations of increasing demand, the ability to satisfy demand through technology-driven efficiencies, and the introduction of new products and services.

Reshaping Supply Chains

Supply chains are a concern for a majority (91%) of US businesses. To combat this, they are increasing the use of technology and choosing suppliers based on the level of COVID-19 control in the country in which a supplier is based and their operational resilience and ability to deliver quickly.

For about half (52%) of US businesses, the use of technology is a key priority in the year ahead. This is followed by focusing on suppliers closer to their customers and suppliers closer to their home region. US businesses hope that the planned changes will bring about a range of benefits and 41% expect that reshaping their supply chain will reduce costs. Other benefits of reshaping supply chains include increased supply chain security and transparency and increased speed to market from positioning itself closer to buyers and consumers.

Investing to Drive Growth

More than seven in ten (72%) companies in the US intend to increase financial investment in their business to become more successful over the next year. Improving customer experience (61%), employee wellbeing (60%) and marketing (54%) are seen as the most immediate investment priorities.

When asked specifically about tech investment, nearly 90% of companies in the US plan to increase or maintain investments in key technologies.

The top priorities for increased tech investment are technologies that:

• enhance customer experience (US: 46% vs. global: 39%)
• target new customers (US: 46% vs. global: 41%)
• enhance automation / operational efficiency (US: 44% vs. global: 39%)
• improve speed to market (US: 43% vs. global: 39%)

Sustainability

The annual survey also showed that companies in the US support the global view that sustainability is good for business. In fact, 94% of companies in the US think there are multiple opportunities for their business from improving its environmental and ethical sustainability. More US companies are also measuring environmental and social aspects of sustainability than in 2019, and between a quarter and two fifths have annual targets in place for diversity, executive pay and water usage.

HSBC Navigator
The HSBC Navigator survey, which is the largest of its kind, is conducted on behalf of HSBC by Kantar. The study gauges sentiment and expectations of businesses in the near to mid-term future on topics including: business outlook, future strategy, international trade, supply chains and sustainability. It is compiled from responses by decision-makers at 10,368 businesses – from small and mid-market to large corporations – across a broad range of industry sectors in 39 markets.

Sample sizes for each market were chosen to ensure the statistical accuracy of results, with 545 businesses surveyed in the US. Global results are based on an average of the 39 markets (using weights based on each market’s share of world trade). The survey was conducted between 11th September and 7th October 2020. Interviewees were polled on a range of questions including how COVID-19 has affected their business and potential for growth. The survey represents a timely source of information on the fast-evolving international business environment.

HSBC Bank USA
HSBC Bank USA, National Association (HSBC Bank USA, N.A.) serves customers through retail banking and wealth management, commercial banking, private banking, and global banking and markets segments. It operates bank branches in: California; Washington, D.C.; Florida; Maryland; New Jersey; New York; Pennsylvania; Virginia; and Washington. HSBC Bank USA, National Association (HSBC Bank USA, N.A.) serves customers through retail banking and wealth management, commercial banking, private banking, and global banking and markets segments. It operates bank branches in: California; Washington, D.C.; Florida; Maryland; New Jersey; New York; Pennsylvania; Virginia; and Washington. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., a wholly-owned subsidiary of HSBC North America Holdings Inc. HSBC Bank USA, N.A. is a Member of FDIC. Investment and brokerage services are provided through HSBC Securities (USA) Inc., (Member NYSE/FINRA/SIPC) and insurance products are provided through HSBC Insurance Agency (USA) Inc.

HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 64 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,956bn at 30 September 2020, HSBC is one of the world’s largest banking and financial services organizations.