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North American report

The latest country report  on the United States, Mexico and Canada (USMCA) region by trade credit insurer, Atradius ( highlights the slowdown in the US economy with GDP forecast to decline from an estimated 2.3% in 2019 to 1.7% in 2020 and 2021; and with a number of risks on the horizon, the forecast decline could accelerate. Industrial production downturn and trade-related uncertainty have impacted investment growth.

At the same time, corporate profits have been squeezed by rising import prices due to higher tariffs, increased labour costs and lower external demand.  US exports are affected by the ongoing trade uncertainty, lower demand in key export markets, a global slowdown in manufacturing and the competitive disadvantage of a strong USD for US exporters.  Despite the recent phase one trade deal between the US and China, there is little clarity on future trade policy.

After nine years of annual decreases, US insolvencies have increased again in 2019 by 2.5% year-on-year and are forecast to rise by 4% in 2020.  Bilateral trade barriers are causing more insolvencies in the agricultural sector, while retailers, in particular, are vulnerable to higher import costs.  Meanwhile , higher corporate debt and the deteriorating creditworthiness of businesses could push insolvency levels even higher this year.

The report suggests that ongoing slowdown across investment, government consumption and exports increases the dependence on further robust private consumption growth.  Therefore, any shock that would trigger a deterioration of household consumption growth could send the US economy into a recession.

“When a business is trading with an individual customer on the other side of the world the risks faced may be daunting, but understanding the market and the economic landscape is key,” says Darren Power, Regional manager for Atradius’ Northern Regional Hub.

“When it comes to international trade, information is the key to growth.  Staying abreast of developments in the economic, political and insolvency environment as well as monitoring for any red flags such as changes in payment behaviours.  With expert insights, advice and real-time information on markets and millions of companies around the globe, Atradius has become a true business partner to its customers; protecting from risk and facilitating successful trade.”

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