Half of suppliers see revenues climbing; South America, Asia-Pacific offer a shot at growth
HONG KONG, Nov. 27, 2012 /PRNewswire/ -- China exporters foresee a tough business environment in 2013, but remain hopeful for growth in overseas orders. This is highlighted in the latest survey of 1,546 exporters by Global Sources (NASDAQ:GSOL).
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Optimism is lower than it was in a similar survey conducted a year ago on 1H 2012 projections when nearly all respondents said they were certain of export growth. Compared with 2H 2012 expectations, meanwhile, the outlook for 2013 is more positive as fewer companies foresee a drop in outbound revenue.
Fifty-one percent of respondents said they expect revenues from overseas shipments to be higher next year. Among these companies, 47 percent estimated 10 to 20 percent growth. Roughly one-fifth anticipate an increase of up to 10 percent, while 22 percent expect gains to be substantial at 21 to 30 percent.
Thirty-six percent of surveyed companies are more conservative, pegging 2013 export revenue at 2012 levels as they contend with several issues hindering growth. The rest of the respondents anticipate earning less from international transactions next year.
"Many China suppliers are still dealing with higher production costs that have forced them to raise prices. This adds pressure to the already difficult export environment, with slowing business from the traditional markets of the EU and the US," said Craig Pepples, Global Sources' President of Corporate Affairs.
"Strategies such as market diversification and upgrading product design are helping reduce the downside. Thanks to this, the decrease in exports earnings for most manufacturers is less than some expected."
For most companies, emerging markets are expected to continue playing a key role in supporting business in the next 12 months. Moreover:
- 28 percent expect to boost production efficiency in 2013;
- 27 percent said they plan to try lowering production costs to keep prices in check;
- A similar number of surveyed manufacturers said they may launch upscale products to justify higher quotes;
- 23 percent said they may move up to product segments that generate higher margins; and
- 19 percent plan to explore business opportunities within China.
Rapidly branching out to new markets
Survey results indicate China exporters plan to continue targeting the EU and the US in 2013, although orders remain slow. They intend to bank on a wider selection of upscale and basic products to reinvigorate demand there.
At the same time, companies may pursue business in alternative destinations. Foremost among their options is South America, followed by the Asia-Pacific region. Manufacturers also expect to strengthen their exporting presence in the rest of Europe.
Global Sources interviewed 1,546 China exporters from the electronics, telecom and computer products, fashion accessories, home products, gifts and premiums, garments and accessories, security products, baby and children's products, solar and energy-saving. The survey was conducted for three weeks in October 2012. General, sales and export managers, and owners, were among the high-level representatives who provided their insight and projections.
The complete survey is available for free at http://www.globalsources.com/NEWS/Survey-hope-for-moderate-growth-2013-outweighs-decline-fears-112212.html.
Global Sources is a leading business-to-business media company and a primary facilitator of trade with Greater China.
The core business facilitates trade between Asia and the world using English-language media such as online marketplaces (http://www.globalsources.com), print and digital magazines, sourcing research reports, private sourcing events, trade shows, and online sourcing fairs.
Over 1.18 million international buyers, including 90 of the world's top 100 retailers, use these services to obtain product and company information to help them source more profitably from overseas supply markets. These services also provide suppliers with integrated marketing solutions to build corporate image, generate sales leads and win orders from buyers in more than 240 countries and territories.
Global Sources' other businesses provides Chinese-language media to companies selling to and within Greater China. These services include online web sites, print and digital magazines, seminars and trade shows. In mainland China, Global Sources has a network of more than 30 office locations and a community of over 4 million registered online users and magazine readers of its Chinese-language media.
Now in its fifth decade, Global Sources has been publicly listed on the NASDAQ since 2000.
SOURCE Global Sources