Canadian SMEs want local exporters to look for trade opportunities beyond the USA due to theimpact of the rising national debt in the USA, according to a survey by UPS Canada.
Conducted by Angus Reid and commissioned by UPS Canada, the quarterly survey revealed that 85%of SMEs believe the rising debt level in the USA is a cause for concern while 60% say exportersshould seek other options immediately.
The survey results follow the recent forecasts from Export Development Canada (EDC) indicatingthat Canada’s exports will be back to pre-recession levels by 2012 and that emerging markets willaccount for 50% of Canadian exports by 2025.
“Many businesses are beginning to see that there are advantages to diversifying exports so thatthere’s a healthy balance between their reliance on the US market and other strategic globalmarkets,” said Mike Tierney, president, UPS Canada. “Canadian economists and the Bank of Canadahave long called for the diversification of Canadian exports and it seems many of the country’sSMEs are beginning to take heed.”
Outside of the BRIC nations, SMEs consider Korea and Mexico attractive emerging markets, butremain skeptical about other markets identified by economists as having great potential, includingTurkey, Indonesia and the Philippines.
Many SMEs believe shifts in the federal government’s export focus could help encouragebusinesses to engage in export. 59% of those believe the government is not investing in the rightplaces to drive Canada’s exports while 57% think that the government’s export-oriented decisionsare focused on benefitting large corporations.
“Global trade can often seem daunting to some SMEs, so many are looking to government officialsto make the process easier and less risky,” said Tierney, noting that 69% of SMEs say they have nointention of ever going global.
Interestingly, most of the SMEs surveyed appear not to be negatively affected by some of themore dramatic economic changes in recent years, including the influx of foreign competitors, therising cost of fuel and the rising value of the Canadian dollar. In fact, 63% of SMEs say foreigncompetition has had no impact at all on their business while 54% say they have been equallyunaffected by the rising Canadian dollar and 69% did not have to change their business strategy toaccount for the rising cost of fuel.
“Due to their reluctance to go global, many Canadians SMEs have been generally insulated fromsome of the harsher effects of the recent recession,” Tierney added. “While that may seem like abenefit at this moment, many of these businesses are limiting their growth potential and settingthemselves up for competitive disadvantage in the long term.”
