Canada’s small- and medium-sized businesses have seen a combination of local, national, and global disruptions. The challenge for those who manage SMBs is understanding how to evolve policies and practices to address global market dynamics in order to effectively support the Canadian SMB recovery.
For our Q1 2022 Market Pulse Small Business webinar, our panel of experts discussed the impact of changing global events on the SMB economic landscape globally, as well as, the latest small business insights and credit trends.
This quarter’s presenters included Ian Tobman, Senior Political Risk Analyst with Export Development Canada (EDC); Cato Syversen, global CEO of Creditsafe; and Sinead Gleason, Senior Product Manager at Equifax Canada.
There is growing talk of a global recession led by developed markets. What is EDCs forecast for global growth and is this concern warranted?
Ian Tobman: I would say that the global recession is the number one risk for us. I think the consumer is walking into this period, however, in a much better position than for example, the global financial crisis. Businesses therefore have to respond and make investments to meet this consumer demand. Really, our story is that it’s going to be a risky period, but that we will avoid a global recession, in part because the US economy still has a fairly strong consumer and therefore businesses are reacting to that.
Cato Syversen: I have to agree with Ian. I'm looking at the same thing. There’s the decline in bankruptcies generally, around Europe, especially with that there are a few countries like Germany and the UK and others who are touch and go with a recession. But you know, the buying power from the employees is definitely there.
What global trends is Creditsafe keeping a close eye on right now?
Cato Syversen: It's interesting to see that from 2005 to 2019, global trade increased with $9 trillion. But during the last two years, it's grown by another ten. So we've seen a huge increase in the use of international reports and it's very linked to the supply chain because as the world becomes more of a global arena. It’s something to keep an eye on.
In your opinion, what could trigger the next global recession?
Ian Tobman: I think the concern is really with a significant lag or significant pace, I should say, of federal government action and other central bankers trying to calm inflation that could create some real tightening in the market. The uncertainty of not knowing where the federal government is going and where other central bankers are going – they may make moves more rapidly than expected. While the desired intent is to ensure soft landing, it becomes harder and harder to achieve without predictability.
Cato Syversen: The big risks are how high inflation will stay, what will happen to interest rates, and the war in Ukraine.
For more valuable insights on the economic impact of the pandemic, and global events, watch the full small business quarterly trends webinar and panel discussion.
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