YEAR IN REVIEW
- In 2018, the percentage of S&P 500 sales from foreign countries decreased, after slightly increasing last year, and declining the prior two years. The overall rate for 2018 was 42.90%, down from 2017’s 43.62% and 2016’s 43.16%. The recent high mark was 2014’s 47.82%, and the recent low mark was 2003’s 41.84%. S&P 500 foreign sales represent products and services produced and sold outside of the U.S.
- Sales in Asia slightly declined, while technically remaining the highest of any region, with the use of six-digit precision. Asia accounted for 8.24% of all S&P 500 sales, down from 8.26% in 2017 and 8.46% in 2016, but up from 2015’s 6.77% and 2014’s 7.80%.
- European sales posted their fifth consecutive year of gains, at just a tick lower than Asia. For 2018, European sales increased to 8.24% of all sales, up from 2017’s 8.14%, 2016’s 8.13%, 2015’s 7.79%, and 7.46% in 2014. The UK (which is part of European sales) increased to 1.49% in 2018 from 2017’s 1.12% and 2016’s 1.10%.
- Japanese sales again decreased in 2018, to 1.14% from 2017’s 1.51% and 2016’s 1.52%. African sales inched down as well, to 3.82% from 2017’s 3.90% and 2016’s 3.97%. Sales in Canada declined to 1.98% from 2017’s 2.16% and 2016’s 2.67%.
- Information Technology continued to have the most foreign exposure of any sector, increasing to 58.19% in 2018 from 56.85% in 2017 and 57.15% in 2016. Energy, which was the sector leader in 2016, with 58.88%, declined to 51.28% in 2018 from 54.06% in 2017.
- Pro forma tabulations for Communication Services (formerly Telecommunication Services) showed that 44.74% of sales were foreign.
- Given the ongoing debate and legislative actions on sales, tariffs, and jobs, the level of specific data disclosed by companies continues to be disappointing.
In 2002, we removed foreign issues from the S&P 500. However, being an American company (or defined as an American company) doesn’t mean you’re not global. While globalization is apparent in almost all company reports, exact sales and export levels remain difficult to obtain. Many companies tend to categorize sales by regions or markets, while others segregate government sales. Additionally, intracompany sales—and hence, profits—are sometimes structured to take advantage of trade, tariffs, taxes, and regulatory policies. Changes in domicile, inspired by tax savings and nationalistic policies, have also changed the technical classification of what is considered foreign. Therefore, the resulting reported data available to shareholders is significantly less substantial and less revealing than the data that would be necessary to complete a truly comprehensive analysis. However, using the data that is publicly available, we do offer an annual report on foreign sales, which is designed to be a starting point that provides a unique glimpse into global sales composition, but it should not be considered a statement of exact values.