European companies’ foreign sales have dropped to their lowest levels over the past five years with global trading conditions continuing to worsen. That’s according to new research from HSBC, which suggests that stretched supply chains, geopolitical tensions, and worsening financial conditions have been the primary drivers of “de-globalization” recently. These factors, among others, have forced many global companies to “substantially” turn inward in search of resilient revenue and growth. The report titled “A de-globalisation wave?” said European firms’ foreign sales dipped below 50% in 2021, the lowest level in the last five years. The continent has traditionally been home to one of the most geographically diverse markets, but this trend appears to be changing. In 2021, 48% of FTSE Europe revenues came from outside Europe. The bank’s analyst said this is a drop of more than three percentage points compared to 2019 and 2020 levels. “European corporates are among the most global, but we see signs of them turning inverse,” said Amit Shrivastava, European equity strategist at HSBC. “Tough economic environment and recessionary pressures generally force economies to turn inward. So, at the moment, increased defensiveness is probably helpful.” Here are five non-financial stocks that had the most significant jump in revenue from domestic sources compared to the previous year: HSBC said that even small changes were “significant” and resulted from increasing barriers in global trade over time. According to Global Trade Alert data, around 13% of world trade was affected by tariff increases in 2019 compared with just 1% a decade earlier. Barriers such as these were among the reasons for the change in trade patterns. While most sectors of the European economy shied away from sales to foreign customers in 2021, consumer staples and technology were the only two to record an increase. The dollar ‘s strength over the past year has also been a significant headwind for European exports to the United States. Sales to the U.S. fell by 0.9% in 2021. However, according to HSBC, that fall was more than made up by a 1.1% rise to Germany. The chart below shows that the United States and Germany are two of the largest sales destinations for European companies. The bank said foreign sales to Asian markets had not fallen, signifying that companies were still focusing on high-growth markets in Asia.