In the last 25 years, U.S. exports have grown from under half a trillion U.S. dollars to over one and a half trillion U.S. dollars, according to a February 8, 2018, report from the Census Bureau. You are probably familiar with the statistic that “95 percent of the world’s markets are outside the U.S.” Perhaps you question whether those 7.6 billion have the money to buy your goods. A report by The Brooking Institution, “The Unprecedented Expansion of the Global Middle Class: An Update” offers an answer to that question.
The Brookings report suggests that 3.7 billion of the world’s population of 7.8 billion consists of the middle-class. While the global middle-class is not quite the same as what we imagine here in the U.S., it does represent significant purchasing power. In 2015, the global middle class made up about 33 trillion U.S. dollars of purchasing power. This segment of the world’s population is also growing the fastest and could reach 4.2 billion people by the year 2020. Projections show the global middle class growing at an annual rate of 6 percent a year versus only half a percent in most industrialized nations.
U.S.A. Number One
We are experiencing a rebirth of American manufacturing. This rebirth is due to a variety of factors such as lower producer prices, favorable economic and business conditions, and investments in advanced technologies. According to the most recent “Global Manufacturing Competitiveness Index” published by Deloitte Global and the Council on Competitiveness, the U.S. has emerged as the clear leader in improving its competitive position. This improvement is primarily due to the development and adoption of advanced technology in manufacturing. Projections for 2020 place the U.S. in the number one spot as the top manufacturing nation in the world with the runners-up being China, Germany, and Japan.
However, the data also suggest that building a resilient manufacturing base will require U.S. companies to rely more on foreign markets than domestic ones for sustainable growth. International trade is a crucial driver of small business success according to the Small Business Exporters Association (SBEA). Businesses that export are 8.5 percent less likely to go out of businesses than those that do not and 26 percent more likely to outperform in their market segment.
The Top Ten U.S. Export Markets
Below is a list of the top ten U.S. trade partners in 2017 by percentage of U.S. exports. The table is from Census Bureau data compiled by World City Inc., a media company in Coral Gables, Florida.
- China: 16 %
- Canada: 15%
- Mexico: 14%
- Japan: 5.3%
- Germany: 4.4%
- South Korea: 3.1%
- The United Kingdom: 2.8%
- France: 2.1%
- India: 1.9%
- Italy: 1.8%
World City Inc. ranks the top five U.S. export markets by growth amongst our trade partners in 2017 as follows:
- Iraq: 65.1% growth
- Nigeria: 52.1% growth
- Norway: 23.8% growth
- Kuwait: 22.3% growth
- Poland: 20.8% growth
Choosing Your Markets
There are numerous free or low-cost resources available to help you choose the right market. Check out our blog “You Can't Pick your Family, but You Can Pick your Market," to find links to U.S. Government resources and useful tips on getting started.
Do you have five minutes to spare? Check out the U.S. Department of Commerce’s Export Market Videos. These five-minute videos include interviews with in-country trade experts focusing on the 20 dynamic export market destinations that account for nearly 70 percent of U.S. exports.
To Boldly Go
Just as personal growth requires you step outside of your comfort zone, so does selling your product or service in a foreign market. According to the Small Business Administration, only one percent of all of America's small businesses are exporters. The primary challenges reported by small businesses are access to information, capital, and market entry. These challenges are surmountable. Striking out into the great unknown is never an easy proposition, but the U.S. Department of Commerce and the Export-Import Bank of the United States (EXIM) can help.
Learn how EXIM export credit insurance can help your business manage the risk of foreign customer nonpayment, gain access to working capital, and offer competitive financing to your international buyers.
Download our 10 step guide, Export Expertise, to learn how to become an expert on export finance. Give us a call if you have any questions by clicking on the link below.