report...active sme exporters non-exporting sme market (n: 871) (n: 643) ceo/business owner 42.1...

March 2015

Efic SME Exporter Index – March 2015

About Efic Efic supports the growth of Australian companies in their international activities by providing tailored financial solutions when the private market faces constraints. As Australia’s export credit agency, we assist Australian-based businesses so that they can take advantage of commercial export and overseas investment opportunities. We also support buyers of Australian goods and services in emerging markets and subcontractors to Australian exporters. We work directly with businesses and their banks to provide loans, guarantees, bonds and insurance products. Efic is uniquely placed to do this. We have over 50 years of finance and industry expertise, contacts at financial institutions around the globe, the strength of our AAA credit rating and an entrepreneurial business approach. We practice responsible lending and uphold social and environmental best practice in the transactions we support.

About the research Unless otherwise stated, data and the associated conclusions that appear in this document come from research commissioned by Efic and conducted by East & Partners in March 2015. This project involved a random sample of 871 Australian exporting SMEs with a turnover up to $100 million and 643 non-exporting SMEs. Further details about this project can be obtained from Efic.

Research contact If you have any questions about the information contained in this document, please contact: Geir Kristiansen, Senior Manager, Customer Insights, Efic at: [email protected] or on +61 2 8273 5333. The information in this document does not comprise advice or a recommendation and Efic makes no representation or warranty relating to it. To the maximum extent permitted by law, Efic will not be liable for any direct or indirect loss or damage incurred by any person on

the basis of information in this document.

Efic SME Exporter Index – March 2015

Contents Executive summary ............................................................................................................. 1

Methodology ........................................................................................................................ 3

Core results ......................................................................................................................... 6

Non-exporting SMEs with specific export plans ....................................................................................... 7

Current offshore revenue relativities ........................................................................................................ 9

Export proportion of overall revenue in next 12 months......................................................................... 11

Largest market sector being exported to ................................................................................................ 13

Most important export geographies for SMEs ........................................................................................ 15

Key reason for SMEs’ most important overseas market ........................................................................ 17

Expected changes in overseas sales ..................................................................................................... 19

Key reason for expected changes in overseas sales ............................................................................. 21

Expected profitability of international operations .................................................................................... 23

Expected change in business staffing headcount .................................................................................. 25

Expected changes in access to finance for overseas business activity ................................................. 27

Key reason for access to finance in offshore business becoming more difficult .................................... 29

Overseas versus domestic sales margins .............................................................................................. 31

Expected change in cost of exporting .................................................................................................... 33

Key drivers of expected changes in cost of exporting ............................................................................ 35

Export volumes by channel .................................................................................................................... 37

Involvement in offshore production processes ....................................................................................... 39

Efic SME Exporter Index – March 2015 Page 1

Executive summary Sentiment SME exporters have started 2015 quite optimistically, with 39% of respondents expecting their export sales to increase over the next 12 months. Increased overseas demand (24%) was the main reason provided for this increase. Looking longer term, this optimism around export sales growth has also increased since this time last year, up 8%, while over the same period the percentage of SME exporters that suggested further falls in the AUD will be the main driver for increased export sales has decreased (70% down to 23%). The fact that the Australian dollar has also fallen 13% against the US dollar during this time is one explanation for this decrease. While overall sentiment, as measured by expectations for future export sales, is up compared to this time last year, the proportion of SME exporters that expect the profitability of their international operations to increase has fallen by 5%. However, 28% of exporters in Q1 2015 expected the profitability of their international operations to increase over the next 12 months while, perhaps just as importantly, the majority of respondents (69%) expected the profitability of their international operations to remain the same.

Access to finance Since the start of 2014, the proportion of SME exporters expecting that access to finance would become more difficult has grown by 157%. This looks set to continue in 2015, with 58% of surveyed SMEs in Q1 2015 expecting to find it more difficult to access finance for their export or international operations in the next 12 months. A recent credit refusal was the main reason given by respondents for this view (24%), with just over half that number (13%) believing a weakening of their own financial performance would make it harder to access finance.

Financials The proportion of overall revenue attributed to export sales increased by 25% during 2014, highlighting just how important exports have become to those SMEs surveyed. The Q1 2015 results show that, for the SME exporters surveyed, exports now make up 16% of total revenue, with this forecast to grow by another 4% in the next 12 months. Interestingly, smaller exporters (with turnover between $100,000-$1m) are the most positive, with this group expecting exports, as a proportion of overall revenue, to grow by 6% in the next 12 months.


Markets

The percentage of SME exporters surveyed that named China as their most important export market has grown by almost 6% in the last 12 months.

In Q1 2015, 26% of those surveyed pointed to China as their most important export market, followed by Oceania/New Zealand (20%), India (11%) and the USA (10%).

When asked why it was their most important export market, SME exporters mentioned future growth prospects and their past efforts to grow this overseas market as the main reasons, with:

o 17% stating that is their highest growth market

o A further 16% stating it is the market with the most existing customers.

Wholesale trade remains the largest customer sector for those SME exporters surveyed, despite falling by 8 percentage points over the last year, due to the continuing swing towards services exports, away from product exporting. At the start of 2014, 26% of respondents stated that wholesale trade was their largest customer sector, with 25% expecting it to remain the largest in 12 months time. Interestingly, 13% less SME exporters in Q1 2015 thought wholesale would be their largest customer sector in 12 months.


Methodology A natural sample of 871 exporting SMEs were interviewed nationally in February 2015, along with another natural sample of 643 non-exporting SMEs. The non-exporting SMEs were included as a way of understanding the future plans of SMEs, their intentions to begin exporting and to make offshore investments. Each round of the index uses this approach. The demographics and segmentation of the exporting and non-exporting groups interviewed in this fifth round of the research are as follow: TABLE A Sample distribution by annual turnover % of Total

Active SME Exporters Non-Exporting SME Market

(N: 871) (N: 643)

A$100,000 – 1 million 16.9 30.6

A$1 – 10 million 31.5 31.3

A$10 – 20 million 31.1 20.8

A$20 – 100 million 20.6 17.3

TOTAL 100.0 100.0


TABLE B Sample geographical distribution % of Total


(N: 871) (N: 643)

NSW & ACT 39.8 40.5

VIC & TAS 26.6 27.6

QLD & NT 14.0 12.1

SA 7.5 8.4

WA 12.1 11.3

TOTAL 100.0 100.0

TABLE C Sample interviewee distribution


(N: 871) (N: 643)

CEO/Business Owner 42.1 36.3

CFO 15.3 14.9

Company Accountant / Financial Controller 35.7 37.1

Trade Officer 3.8 -

Other 3.1 11.6

TOTAL 100.0 100.0


TABLE D Sample industry sector distribution % of Total


(N: 871) (N: 643)

Agriculture, Forestry and Fishing 9.4 3.4

Mining 6.2 1.6

Manufacturing 20.8 6.4

Electricity, Gas, Water and Waste Services - 1.4

Construction 4.1 5.9

Wholesale Trade 27.0 12.4

Retail trade 4.7 13.2

Accommodation and Food Services 0.5 2.8

Transport, Postal and Warehousing 2.8 8.4

Information, Media and Telecommunications 1.5 2.0

Financial and Insurance Services 3.7 5.4

Rental, Hiring and Real Estate Services 5.1 11.2

Professional, Scientific and Technical Services 7.8 8.4

Administrative and Support Services 1.1 4.3

Public Administration and Safety 0.3 1.4

Education and Training 2.8 4.5

Health Care and Social Assistance 0.8 1.6

Arts and Recreation Services 0.2 0.9

Other Services 1.3 4.8

TOTAL 100.0 100.0


Core results


Non-exporting SMEs with specific export plans ■ Non-exporting SMEs are starting to strengthen their short term overseas growth intentions, with plans

to sell both goods and services overseas returning to the level attained six months ago. ■ Long term plans continue to exceed SME’s short term expectations, with intentions to sell goods,

services and invest overseas all improving soundly over the past three months. ■ SMEs who have no export plans at all contracted again this quarter, marking a near 20 percent decline

over six months. TABLE 1 Non-exporting SMEs with specific export plans % of Non Exporters

(N: 643) Next 3 Months Next 12 Months

Sell goods overseas 6.5 8.4

Sell services overseas 10.0 13.8

Invest overseas 1.6 2.0

None of the above 60.5 43.7

TOTAL 78.5 68.0


FIGURE 1 Non-exporting SMEs with specific export plans % of Non Exporters

0

10

20

30

40

50

60

70

80

Sell goods overseas

Sell services overseas

Invest overseas None of the above TOTAL

Next 3 Months Next 12 Months


Current offshore revenue relativities ■ The average percentage of overall enterprise revenue SMEs derive from exports is increasing

steadily, strongest amongst SMEs with turnovers of A$10-20 million, albeit all segments showing gains.

■ Larger businesses have higher proportions of export revenue than their smaller peers. ■ The export revenue gap between businesses with turnovers of A$1-10 million and those with turnovers

between A$10 – 20 million has grown over the past year, suggesting an” economies of scale” barrier exists which SMEs need to cross before step-jumping to the next level of export revenue scale.

TABLE 2 Current overseas proportion of all annual revenue

(N: 871) % of SME Exporters Average % of Revenue

A$100,000 – 1 million 16.9 8.1

A$1 – 10 million 31.5 13.8

A$10 – 20 million 31.1 19.5

A$20 – 100 million 20.6 20.2

TOTAL 100.0 15.9


FIGURE 2 Current overseas proportion of all annual revenue

0

5

10

15

20

25

0

5

10

15

20

25

30

35

40

45

50

A$k-1m A$1-10 m A$10-20 m A$20-100 m

% of SME Exporters Average % of Revenue


Export proportion of overall revenue in next 12 months ■ Overall export revenue expectations for SMEs are rising, reflecting stronger confidence in global trade

conditions and a lower Australian dollar. SMEs expect export income to comprise 16.6 percent of their total revenue in the next 12 months.

■ Larger businesses are more confident. The top two segments are both expecting over 20 percent of

their revenue to come from exports in the medium term, significantly higher than other segments. TABLE 3 Proportion of overall revenue in next 12 months

(N: 871) % of SME Exporters Average % of Revenue

A$100,000 – 1 million 16.9 8.7

A$1 – 10 million 31.5 14.3

A$10 – 20 million 31.1 20.2

A$20 – 100 million 20.6 21.1

TOTAL 100.0 16.6


FIGURE 3 Proportion of overall revenue in next 12 months

0

5

10

15

20

25

0

5

10

15

20

25

30

35

40

45

50

A$k-1m A$1-10 m A$10-20 m A$20-100 m

% of SME Exporters Average % of Revenue


Largest market sector being exported to ■ Wholesale Trade’s continuing decline reflects the swing toward services exports, away from product

exporting, noted above. These consecutive contractions, if they continue, could see the industry reduce to less than 20 percent in the medium term.

■ The resource sector’s commodity crash has seen further contraction in the mining sector. Although the speed of market deterioration is slowing down, SME exporters expect the sector will contract in the next 12 months.

■ Service sectors such as Professional, Scientific and Technical Services and Health Care and Social Assistance are showing the strongest growth amongst export market sectors for Australian SME exporters, with above average growth rates expected.

■ Retail trade continues to be the stand out sector with its further projected growth of one percentage point over the next 12 months.

TABLE 4 Largest sector being exported to % of SME Exporters

(N: 871) Currently 12 Months Time

Agriculture, Forestry and Fishing 4.1 4.4

Mining 11.7 10.3

Manufacturing 13.8 13.7

Electricity, Gas, Water and Waste Services 0.5 0.5

Construction 6.2 6.4

Wholesale Trade 22.7 21.9

Retail trade 17.7 18.7

Accommodation and Food Services 3.9 4.0

Transport, Postal and Warehousing 4.2 4.0

Information, Media and Telecommunications 2.9 3.0

Financial and Insurance Services 1.6 1.6

Rental, Hiring and Real Estate Services 0.3 0.5

Professional, Scientific and Technical Services 4.6 5.1

Administrative and Support Services 0.3 0.2

Public Administration and Safety 0.2 0.2

Education and Training 1.6 1.8

Health Care and Social Assistance 1.8 2.1

Arts and Recreation Services 0.2 0.2

Other Services 1.5 1.4

TOTAL 100.0 100.0


FIGURE 4 Largest sector being exported to % of SME Exporters

0

5

10

15

20

25

Currently 12 Months Time


Most important export geographies for SMEs ■ China remains the most important trading partner for Australian SMEs despite a weaker medium term

outlook relative to previous rounds. ■ Confidence in India is increasing in both short term and medium term importance, following talks of the

free trade agreement between Australia and India entering its final stages in January. ■ The weakened Australian dollar has boosted confidence for SMEs looking to trade with USA. TABLE 5 Most important export markets for SMEs % of SME Exporters

(N: 871) Next 3 Months 12 Months Time

Africa 0.7 0.7

China 25.8 25.9

Eastern Europe 1.5 1.1

India 10.4 10.9

South Korea 3.2 3.4

Japan 6.9 7.1

Middle East 2.2 1.8

Oceania / New Zealand 20.2 19.9

Rest of Asia 10.7 10.9

USA 9.3 9.6

Western Europe 8.0 8.0

Other 1.0 0.5

TOTAL 100.0 100.0


FIGURE 5 Most important export markets for SMEs % of SME Exporters

0

5

10

15

20

25

30

Next 3 Months 12 Months Time


Key reason for SMEs’ most important overseas market ■ Growth potential continues to be the number one reason for SME exporter focus on particular

geographies, followed by existing trading relationships. This outcome further clarifies key market trends discussed earlier - developing markets such as India and China continue displaying strongest growth potential for Australia SMEs and are major existing trading partners with Australia.

■ The recovering US economy on the other hand is once again seen as offering growth opportunity as

well as being a relatively safe haven for Australian SME exporters. ■ The combined percentage of strong in-market contacts and network and relatively easier market entry

experience(s) now together represent 30.1 percent of all reasons tabled for why a specific market is seen to hold greatest upside for exporters

TABLE 6 Key reason for this being your most important overseas market % of SME Exporters

(N: 871)

Highest growth offshore market for us 17.0

Existing customers in market 16.5

Strong in-market contacts and network 16.0

Relatively easiest market entry experience(s) 14.1

Not planned, is just working out that way 9.9

Biggest size of market available for us 9.1

Able to price offerings very competitively there 7.6

Little/no in-market competition 6.7

Other / not sure 3.2

TOTAL 100.0

Note: one key reason allowed in response to improve clarity of answers Note: no significant variance in responses by key export market/country


FIGURE 6 Key reason for this being your most important overseas market % of SME Exporters

0 2 4 6 8 10 12 14 16 18

Highest growth offshore market for us

Existing customers in market

Strong in-market contacts and network

Relatively easiest market entry experience(s)

Not planned, is just working out that way

Biggest size of market available for us

Able to price offerings very competitively there

Little/no in-market competition

Other / not sure


Expected changes in overseas sales ■ Exporting SMEs are increasingly optimistic towards their future overseas sales. One in three SMEs

expect their short term sales to rise in the next three months while almost 40 percent of SMEs see their medium sales volume to improve.

■ The number of bearish SMEs is continuing to diminish for both forecast periods. Over the past six

months, the percentage of exporting SMEs who expect their overseas sales volume to decrease contracted from 4.5 to 3.7 in short term outlook, and from 3.8 to 3.4 in medium term outlook.

TABLE 7 Expected changes in overseas sales % of SME Exporters


Increase 33.1 38.9

Decrease 3.7 3.4

Stay the same 63.3 57.6

TOTAL 100.0 100.0


FIGURE 7 Expected changes in overseas sales % of SME Exporters

0

10

20

30

40

50

60

70

80

90

100


Stay the same

Decrease

Increase


Key reason for expected changes in overseas sales ■ The falling Australian dollar is now the second most significant driver of export volume changes among

SME exporters, having fallen from its number one position in the previous quarter

■ Better business conditions and improved demand in existing markets remains the most common driver of change in export volumes among SMEs.

■ Exporting SMEs are also becoming ever more prudent in managing their cost of business. Nearly one

in ten SMEs now nominate cost reduction as the key reason for overseas sales change. TABLE 8 Key reason for changes in overseas sales % of SME Exporters

(N: 339)

Better business conditions, improved demand in existing markets 24.2

Improved sales strategy 20.9

Australian exports will become cheaper from a falling AUD 22.7

New products/services 18.0

Cost reduction 9.1

Entry into new geographic markets 4.7

Other 0.3

TOTAL 100.0

Note: only analysing exporters with expected overseas sales increases


FIGURE 8 Key reason for changes in overseas sales % of SME Exporters

0 5 10 15 20 25 30

Better business conditions, improved demand in existing markets

Improved sales strategy

Australian exports will become cheaper from a falling AUD

New products/services

Cost reduction

Entry into new geographic markets

Other


Expected profitability of international operations ■ Optimism around export profitability is returning to SMEs after a brief period of decline towards the end

of 2014. Both short term and medium term increases in profitability are expanding. 23.3 percent of exporting SMEs expect their profitability to increase in the next three months, up from the previous 22.2 percent, while 28.1 percent expect it to increase in the next 12 months.

■ The number of SMEs expecting their international operation profitability to decrease has remained

relatively stable. ■ There is a distinct shift in SME outlook from ‘stay the same’ to ‘increasing’ as SMEs become more

growth focused. TABLE 9 Expected profitability of international operations % of SME Exporters


Increase 23.3 28.1

Decrease 3.7 3.0


TOTAL 100.0 100.0


FIGURE 9 Expected profitability of international operations % of SME Exporters

0

10

20

30

40

50

60

70

80

90

100


Stay the same

Decrease

Increase


Expected change in business staffing headcount ■ Headcount adjustments in both short and medium terms have fallen. Most SMEs are preparing to

either decrease or maintain their current staffing levels, suggesting a shift towards productivity focused strategies in meeting growth demands.

■ SMEs planning to increase their staffing levels in the next three months now represent 4.1 percent of

all exporting SMEs, down from 4.4 percent in December 2014. Those planning to increase headcount in the next 12 months has dropped further and now account for 4.2 percent, down from 4.7.

TABLE 10 Expected change in business staffing headcount % of SME Exporters


Increase 4.1 4.2

Decrease 15.8 19.1


TOTAL 100.0 100.0


FIGURE 10 Expected change in business staffing headcount % of SME Exporters

0

10

20

30

40

50

60

70

80

90

100


Stay the same

Decrease

Increase


Expected changes in access to finance for overseas business activity ■ The majority of exporting SMEs expect access to credit for overseas business activity to become more

difficult over time. Around half of all SMEs in this current round expect negative changes in credit access in the next three months, with a further five percentage points expecting the same change in the next 12 months.

■ Sentiment deterioration among SMEs with less than A$10 million in turnovers is the predominant

cause for the rise in SMEs expecting credit access becoming more difficult. TABLE 11 Expected changes in access to finance for overseas business activity % of SME Exporters


TOTAL MORE DIFFICULT 52.6 57.5

$100,000-$1m segment 14.6 15.6

$1-10m segment 25.1 27.0

$10-20m segment 10.6 11.6

$20-100m segment 2.3 3.3

TOTAL EASIER 2.8 3.6

$100,000-$1m segment - -

$1-10m segment - -

$10-20m segment 0.3 0.5

$20-100m segment 2.4 3.1

TOTAL REMAIN THE SAME 44.7 38.9

$100,000-$1m segment 2.3 1.3

$1-10m segment 6.3 4.5

$10-20m segment 20.2 19.1

$20-100m segment 15.8 14.1

TOTAL 100.0 100.0


FIGURE 11 Expected changes in access to finance for overseas business activity % of SME Exporters

0

10

20

30

40

50

60

70

80

90

100


Stay the same

Easier

More Difficult


Key reason for access to finance in offshore business becoming more difficult ■ The proportion of SMEs expecting credit access in offshore business support to become more difficult

cite their credit lines being withdrawn, reduced or simply refused – an outcome that has increased from 40.4 percent at the end of 2014 to 43.3 percent.

■ According to SMEs weak financial performance is becoming less relevant in whether or not SMEs can

access credit. Weakened cash flow and reduced profitability both contracted in this round of reporting. TABLE 12 Key reason for access to finance in offshore business support to become more difficult % of SME Exporters

(N: 501)

Recent experience with financial institution:

Credit curtailed (lines withdrawn/reduced) 19.8

Credit refused 23.6

Change in type of credit offered / available 8.2

Financial performance has weakened:

Cash flow weakened 6.4

Profitability declined 6.8

Lack of collateral required by bank 8.8

Expect cost of credit to increase 2.6

Bank increasing collateral / information requirements 10.4

Bank lacks understanding of potential foreign markets 11.6

Future business plans involved increased business risk 1.2

Other 0.2

No view / unsure 0.6

TOTAL 100.0


FIGURE 12 Key reason for access to finance in offshore business support to become more difficult % of SME Exporters

0 5 10 15 20 25

Credit curtailed (lines withdrawn/reduced)

Credit refused

Change in type of credit offered / available

Cash flow weakened

Profitability declined

Lack of collateral required by bank

Expect cost of credit to increase

Bank increasing collateral / information requirements

Bank lacks understanding of potential foreign markets

Future business plans involved increased business risk

Other

No view / unsure


Overseas versus domestic sales margins ■ Across the market, the average sales margin variance is 1.211 - more than nine percent higher than

the average variance six months ago. The weakened Australian dollar would contribute to this outcome.

■ Exporters in the bigger two segments have higher variances than their smaller peers. Smaller

businesses, however, have made the most improvement in export gross margins over the past six months, suggesting a greater exposure to currency movements.

TABLE 13 Overseas versus domestic sales margins Average +ve/-ve Variance

(N: 871) (Overseas/Domestic)

A$100,000 – 1 million 1.106

A$1 – 10 million 1.177

A$10 – 20 million 1.249

A$20 – 100 million 1.293

TOTAL 1.211


FIGURE 13 Overseas versus domestic sales margins Average +ve/-ve Variance

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

A$k-1m A$1-10 m A$10-20 m A$20-100 m Total


Expected change in cost of exporting ■ The average cost of exporting is expected to rise 5.3 percent in the next 12 months, slightly less than

the previous quarter’s 5.9 percent. ■ Economy of scale is becoming more important for exporting SMEs. The difference in expected cost

change between the bottom and top segment currently sits at 5.8 percent, 0.3 percent higher than previous quarter’s 5.5 percent.

TABLE 14 Expected change in cost of exporting Average % Change

(N: 871) Next 12 Months

A$100,000 – 1 million 8.9

A$1 – 10 million 5.7

A$10 – 20 million 4.4

A$20 – 100 million 3.1

TOTAL 5.3


FIGURE 14 Expected change in cost of exporting Average % Change

0

1

2

3

4

5

6

7

8

9

10

A$k-1m A$1-10 m A$10-20 m A$20-100 m Total


Key drivers of expected changes in cost of exporting ■ More than half of exporting SMEs now note labour costs as the key driver for potential changes in the

cost of exporting, slightly higher than previous quarter’s 49.6 percent. ■ Borrowing costs have also trended higher, increasing marginally from 36.5 percent in December 2014

to 37 percent now. This is another reflection on SMEs’ perception towards difficulties in accessing credit.

■ All other costs are becoming less relevant to SMEs in their forecasts of exporting cost changes. TABLE 15 Key drivers of expected changes in cost of exporting % of SME Exporters

(N: 871)

Labour costs 51.9

Borrowing costs 37.0

Transport 6.2

Regulatory costs 4.5

Other 0.5

TOTAL 100.0


FIGURE 15 Key drivers of expected changes in cost of exporting % of SME Exporters

0

5

10

15

20

25

30

35

40

45

50

55

Labour costs Borrowing costs Transport Regulatory costs Other


Export volumes by channel ■ Nearly half of all export sales made by SMEs are effected to overseas distributors or wholesalers. This

volume, however, has contracted marginally since December 2014, from 50.8 percent to 48.1 percent. ■ The growing number of direct sales to end customers is also notable and SMEs focus on the cost of

sale using intermediaries to reach the end user. ■ Online sales is also steadily expanding, highlighting the increasing importance of this distribution

channel. TABLE 16 Export volumes by channel Average % Export Volumes

(N: 871)

Sales to overseas distributors/wholesalers 48.1

Direct sales to end customers 29.6

Sales to overseas subsidiaries/foreign affiliates 8.6

Online sales 12.8

Other 0.9

TOTAL 100.0


FIGURE 16 Export volumes by channel Average % Export Volumes

0 10 20 30 40 50 60

Sales to overseas distributors/wholesalers

Direct sales to end customers

Sales to overseas subsidiaries/foreign affiliates

Online sales

Other


Involvement in offshore production processes ■ SMEs are to a certain extent involved with overseas production, and the overall participation level has

increased marginally from 32.3 percent in December 2014 to 33.4 percent now. ■ Of those SMEs involved in an offshore production process, nearly half are do so by way of importing

foods or raw materials for sales overseas. The percentage of exporting SMEs participating in this way has increased from 14.7 percent in the previous quarter to the current 15.3 percent.

■ There are increased levels of involvement in most other “process” areas with the exceptions of

internationally market and distribute a product produced overseas. TABLE 17 Involvement in offshore production processes % of SME Exporters

(N: 871) Next 3 Months

Process imported goods or raw materials for sales overseas 15.3

Provide international post-sales services for a foreign firm's products 6.7

Produce an input to a product produced overseas 6.9

Internationally market or distribute a product produced overseas 3.3

Provide R&D / design input to a product produced overseas 4.1

None of the above 66.6

Note: sums to over 100 percent count due to multiple responding


FIGURE 17 Involvement in offshore production processes % of SME Exporters

0 10 20 30 40 50 60 70

Process imported goods or raw materials for sales overseas

Provide international post-sales services for a foreign firm's products

Produce an input to a product produced overseas

Internationally market or distribute a product produced overseas

Provide R&D / design input to a product produced overseas

None of the above

report...active sme exporters non-exporting sme market (n: 871) (n: 643) ceo/business owner 42.1...

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