Today, the IMF said the crisis will cause the deepest recession since the 1930’s great depression, with growth contracting 3%. This will be followed by a growth spurt of 5.9%. While this is prediction, export companies should ready themselves to navigate the impact this will have on an interconnected business world and a global supply chain.
Businesses are cautiously looking to China to better understand what will happen to their recovery and the potential guidance it will provide. And there are some encouraging signs. Apple announced that its supply inventory from China is recovering and overall manufacturing in the country is coming back to life. We hope that what happens in the weeks ahead, will provide further direction and we will continue monitor and provide our thoughts as we learn more.
We do expect changes to global supply and demand as countries and businesses look for greater security and resiliency going forward. For exporters, this means anticipating second and third factor ‘follow-on’ impacts to this crisis. It is likely that consumers, businesses and governments are going to re-evaluate their needs and purchase more thoughtfully. Expect increased protectionism, however, this will not end our reliance on a global world of interconnectivity, but it will likely impact the way we conduct business.
Throughout all of this, staying innovative and agile will be important. Seek counsel and support from advisors who have the experience and knowledge to navigate these changes. There will be opportunity to grow quickly and take advantage when the global economy returns to growth.