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On November 25, Export Development Canada hosted a one-hour webinar to provide Canadian exporters an overview of the current American economy and the opportunities it offers. For any Canadian company looking to expand its sales into the U.S., informed decision making is critical to success. That is especially true now, with COVID-19 causing change and uncertainty in both countries.
Stephen Tapp, Deputy Chief Economist & Trade Research Director at EDC, started the session with a broad look at the U.S. economy and the impacts on it of COVID and the recent election. His key points included:
- At their peak, unemployment claims related to the virus were 10 times higher in the U.S. than during the recession in 2008–2009.
- Jobs of low-income earners have been much slower to recover than those of high-income earners. While high-income workers are pretty well back to pre-COVID employment levels, low-income employment remains down about 20%.
- Consumer spending is now higher than it was before COVID struck, although there have been major changes to the types of products and services being purchased.
- Bankruptcies do not appear to have risen due to COVID.
- Applications for new businesses, primarily in the e-commerce arena, have spiked significantly in the last few months.
- In markets where COVID-related restrictions are highest, Canada’s exports have decreased. Getting the virus under control to enable the loosening of restrictions around the world will allow our exports to rise.
- With a Biden presidency, the EDC anticipates that policy uncertainty will diminish.
- U.S. GDP is now just 3% below its pre-COVID level. An overall projected decrease of 3.4% in GDP in 2020 puts the U.S. among the top performers for the year.
Next up, Gayle Roenbaugh, EDC’s Senior Regional Manager for the U.S. Great Lakes Region, said businesses are focusing on resilience, preparing for the unexpected and growing after COVID. They are protecting their supply chains, working with suppliers to ensure their liquidity and building inventories, with an emphasis on “just in case” over “just in time.”
Roenbaugh is also seeing an increase in regional supply chains through which numerous key suppliers are grouping together locally to help build resiliency for all partners.
Michael Gonsalves, Senior Regional Manager for EDC in the southeast U.S., expects that, when he becomes president, Joe Biden will have a robust plan to accelerate the adoption of green energy technologies. He sees this as a good opportunity for Canadian exporters to supply clean energy technology and components; he also believes that green building will increase, providing further opportunities for innovative suppliers.
Roenbaugh added that additive manufacturing, robotics and electric vehicles will create new opportunities. And, because of the disruption to the grocery and consumer goods sectors brought on by COVID (big omnichannel players increasing sales through e-commerce, impacting brick-and-mortar retailers), she believes companies operating in those areas will need to make changes, creating opportunities for innovative solutions.
For Canadian companies, developing business in the U.S. with the ongoing travel restrictions is a challenge. EDC recommends participation in virtual trade shows and the use of EDC or trade-commission services to find opportunities.