This week’s G7 Summit marks the first major in-person gathering of world leaders since the start of the pandemic. Having the leaders meet in-person is a critical signal to businesses and consumers that there is a light at the end of the pandemic tunnel.
(OTTAWA, ON) – May 7, 2020 – Today, the Canadian Chamber of Commerce’s Senior Director of International Policy, Mark Agnew, issued the following statement regarding new data surfaced in the recent Canadian Survey on Business Conditions:
“The CSBC is the first large-scale survey to capture the impacts of COVID-19 being faced by Canadian exporters. A cursory view of the topline numbers suggest that Canadian businesses with domestic and global supply chains are seeing acute pressures.
Several notable data points demonstrate the effects of the pandemic on companies involved in international trade, including:
- Disruption: Only 16.8% of all businesses and 14.5% of exporters reported no disruption experienced by suppliers. However, the no-disruption rate plummets to 6.4% of those who supply to exporters and 6.5% for importers.
- Movement of goods: Moving goods within Canada to exporters or bringing goods into the country has proven to be more cumbersome compared to those businesses who export outright. 41% of all Canadian businesses reported no problems moving goods and 30% of exporters reported no problems. The rate of those reporting no problems drops to 16.2% for companies that supply exporters and 19.9% for importers.
- Demand: While decrease in demand affected all businesses, it had differing impacts on those involved in international trade. 28.9% of importers, 24.5% of firms investing outside of Canada, and 23% of exporters have discontinued a product. Notably only 19.8% of businesses have discontinued a product if they supply a Canadian exporter.
- Investment: 21.3% of Canadian businesses that invest abroad reported postponing M&A compared to the national average of 5.9%. Additionally, businesses that invest abroad have been significantly more likely to scale back on R&D with 24.2% reporting scaling back versus the national average of 6.9%.
It is still very much early days as businesses assess the short-term impacts of COVID-19 on their international activities compared to lasting trends. However, the difficulties businesses are facing with sourcing goods into the country, the pullback of activities for those with investments abroad and the global supply chain disruptions as economies shut down suggests we may be seeing some firms exploring the re-shoring of production.
Disruptions faced by businesses supplying to an exporter is also a symptom of problems the Canadian Chamber has heard from businesses concerned about interprovincial restrictions that have been amplified by COVID-19. Overcoming these barriers will be key for Canada to be a reliable supply chain hub in a dramatically new global economy.”
For more insights about the data collected from the CSBC, click here.
About the Canadian Chamber of Commerce – Because
The Canadian Chamber of Commerce helps build the businesses that support our families, our communities and our country. We do this by influencing government policy, by providing essential business services and by connecting businesses to information they can use, to opportunities for growth and to a network of local chambers, businesses, decision-makers and peers from across the country, in every sector of the economy and at all levels of government, as well as internationally. We are unapologetic in our support for business and the vital role it plays in building and sustaining our great nation.
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