The Diplomat
Spanish companies operating in the United States are optimistic about their business development in this market, where the impact of the shift towards protectionism is still slight.
However, companies are cautious about their future prospects with respect to this type of measures, believe that the entry of new competitors is their main challenge, followed by regulatory changes, and consider that their greatest strength is the quality of their goods and services, and alliances with other partners.
These are some of the conclusions of the report ‘Spanish companies in the United States: prospects and challenges’, carried out by the Leading Brands of Spain Forum (FMRE) in collaboration with ICEX Spain Export and Investment.
This study aims to analyse the performance and business opportunities of our companies in the United States to provide an overview of the challenges facing our companies in a market considered a priority, in this context marked by the post-pandemic recovery, the war in Ukraine, the volatility of the energy market, inflation and protectionism.
The report has been carried out through a survey of 143 Spanish companies that operate there (130) or are interested in doing so (12), through the opinion of a series of experts in this market, and the testimonies of some Spanish multinationals that have been operating in this country for years, such as Acesur, ADEX, CAF, Cosentino, GMV, Mapfre, Santander and SENER.
The results of the survey show that 55% of the companies in the sample state that in 2022 they will have recovered the level of business prior to the pandemic, 33% state that 2023 will be the year in which they will return to the levels of before the health crisis and only 12% consider that the recovery will take place from 2024 onwards, with this recovery in turnover levels being more pronounced for the more consolidated companies in this market.
Approximately 30% of the companies surveyed indicate that the protectionist trade policy applied by the US has had an impact on their exports to the US, 36% of the companies in the industrial sector recognise that this type of measure has had a significant or very significant impact on their strategy, and only 5% of the sample of companies state that they have been affected by the reform of NAFTA.
As for their future outlook with regard to this type of measures, more than half (53.5%) say that they may have a moderate impact and 22% even consider that they may have a major or very major impact. By sector, almost a third (31%) of the industrial sector considers that protectionist measures will be very or quite important in opening up new opportunities in the United States.
For 78% of the companies, the turnover they obtain in this market is an important or very important factor in their decision to operate in this country. Other aspects such as image and prestige (80%) or the possibilities of contacts with partners are also highly valued (78%). For companies in the industrial sectors, the innovation and technology factor is also mentioned and perceived as very important.
Spanish companies identify a series of challenges for the future, the most important of which is the entry of new competitors. Thus, 45.9% consider that the entry of new competitors will be the biggest challenge they face, followed by regulatory changes (34.3%). As strengths, companies point to the quality (63%) of the products offered, brand image and prestige (71%) and competitive price (67%).
Alliances with other partners are considered as a success factor by more than 80% of the companies. In general terms, a very high proportion of companies consider that the most important factors for success in the United States are the quality of products and services and alliances with other partners.
Spanish origin is mentioned by 61% as a strength, while for another 39% this origin represents a weakness that detracts from its value. By sector, the Spanish brand is most appreciated in the food and beverage sector (76%), but this percentage drops to 50% in the industrial sector.
As regards the type of support they need from the government and other institutions, 62% of companies consider the identification of business opportunities to be very important. The identification of partners and the promotion of the Spain brand are also very important, with more than 40% of companies needing support in these two areas.
Trade relations with Spain
Spain imported goods worth €17,089 million from the United States while Spanish exports to that market were €14,769 million in 2021, representing a trade deficit of €2,320 million and a coverage rate of 86.42%.
By sector, machinery and mechanical appliances are the most exported products, followed by fuels and mineral oils, electrical appliances and equipment, vehicles and automobiles, and pharmaceutical products. Spanish imports from the United States are, by sector, fuels and mineral oils in first place, followed by pharmaceutical products, machinery and mechanical appliances, optical appliances and materials, and electrical appliances and material.
As for the services sector, imports from the United States reached 4,464 million euros, while exports amounted to 7,454 million euros, representing a Spanish surplus of 2,990 million euros in 2021.
Bilateral investment flows show that US investment in Spain was 4,293 million euros while Spanish investment in the US market was 5,145 million euros. Spain ranks 11th in direct investment in this country.
