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Business Without Borders: BMO Harris Bank Report Shows 40 Percent of U.S. Businesses With 2015 Investment Plans Will Do So Internationally


CHICAGO, IL--(Marketwired - Nov 6, 2014) -

  • Europe is the top region where businesses will expand
  • Canada ranks as second most popular place for U.S. companies to increase presence
  • Nearly two-thirds of businesses will expand into a country where they currently do not operate

BMO Harris Bank released a report today revealing that 39 percent of U.S. business owners who plan to invest in their business in 2015 have plans to expand their business internationally, with the majority of those expanding into countries in which they currently do not have operations or offices (62 percent).

The survey, commissioned by BMO Harris, ranked the top international locations businesses are targeting for expansion:

  • Europe - 54 percent
  • Canada - 38 percent
  • Asia - 25 percent
  • Central/South America - 10 percent
  • Australia - 10 percent
  • Mexico - 7 percent

Still, 55 percent of the business owners surveyed who are planning to invest in their business next year said they intend to keep their investment dollars stateside.

"While business owners are looking for opportunities outside their borders, many are also responding to positive growth in the U.S. economy and are looking to expand domestically now that revenue is picking up. The manufacturing industry is one example where we are seeing a movement of jobs back stateside," said Dave Casper, Executive Vice President and Head, Commercial Banking, BMO Harris Bank.

"While there are certainly economic rewards for overseas expansion, there are also risks. Companies should ensure they have the right strategies and work with a financial partner to mitigate these challenges," added Mr. Casper.

BMO Harris Bank recommends business owners consider the following when looking at expanding outside the U.S.:

  • Foreign currency risk - Significant shifts in exchange rates can affect revenue expectations. For example, as the U.S. dollar appreciated against other major currencies amid the European debt crisis, companies that had not anticipated the change suffered. Firms paying overseas vendors in U.S. dollars may incur higher prices in exchange for forcing vendors to take on foreign exchange risk. Additional consideration should be given to whether to price your products in local currency or in U.S. dollars. If you are willing to conduct transactions in other currencies, a discount in exchange for the foreign currency exposure may be available.

  • Potential instability of overseas economies - For the past few years, companies involved in international trade have faced a more difficult task as the state of the global economy changes. Companies now deal with new sources of risk to mitigate -- such as the European debt crisis. Some European countries mired in the crisis were not considered significant risks until recently. Conversely, some emerging market countries, such as Brazil, are now considered lower-risk markets.

Sal Guatieri, Senior Economist, BMO Capital Markets, commented, "American companies are taking advantage of a stronger greenback to expand globally to reap the benefits of being closer to customers in faster-growing Asian economies, to cushion revenue in the event of a domestic slowdown, and to tap into a deeper pool of skilled workers."

The survey was conducted by Pollara with an online sample of 781 American business owners between September 8 and 18, 2014. A probability sample of this size would be accurate to +/- 3.5 percent, 19 times out of 20.

About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $586 billion in assets (as of July 31, 2014)



Media Contact:
Alexis Brown
Chicago
alexis.brown@bmo.com
(312) 461-6543


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