As we witness the rapidly evolving global trading landscape, it's essential to keep pace with the trends and changes that might impact your business. Today, we will delve into the details of the recently released trade report from 2022 to unpack the underlying dynamics of exporter and importer characteristics. With its rich insights, it provides a roadmap for understanding the current landscape, and setting a course for the future.
The Power of Medium and Large Enterprises
Despite the rise in the value of both exports and imports in 2022, we saw a slight increase of 0.7% in the number of exporting enterprises, reaching a total of 48,036. The number of importing enterprises remained stable at 160,238. What's particularly interesting is that the growth in trade value was largely driven by medium and large-sized enterprises – those with 100 or more employees. The number of these entities saw increases of 5.9% and 7.2% for exporters and importers respectively.
Small enterprises made up an impressive 94.6% of all traders in 2022, yet did not enjoy a similar increase in trader numbers. Small-sized exporters' numbers remained almost unchanged, while small-sized importers actually saw a slight decrease. This highlights a potential need for support and strategies to promote growth among small enterprises.
Shifting Export Relationships
Canadian export relationships also experienced significant shifts. The number of exporters to the United States rose by 686, reaching a twenty-year high of 40,787 in 2022. This is a stark contrast to the declining number of exporters to Asia and Europe for a third consecutive year.
The decrease was particularly notable among small exporters to the Russian Federation and Ukraine due to the ongoing conflict, as well as to China and Hong Kong due to local economic impacts of public health measures. Such changes underscore the importance of diversifying export markets and adapting to the shifting global geopolitical landscape.
Reversal in Import Trends
On the importing front, the trend reversed. While the number of enterprises importing goods from the United States dipped slightly, we saw a significant increase in goods from Asia, primarily led by Vietnam and India. Europe also saw a slight rise in its number of goods imported, despite a significant decline in those from the Russian Federation.
The Role of Related Party Trade
Related party trade, or intra-firm trade, also played a significant role in 2022, making up over two-fifths of Canada's international merchandise trade value. This refers to transactions between a parent corporation and its affiliate in another country.
While only one quarter of Canadian exporting enterprises traded with a related party, these transactions had an outsized impact, totalling $611.4 billion in 2022 and constituting substantial shares of both exports (45.1%) and imports (41.4%) by value. This highlights the influence of large corporations and conglomerates in global trade.
Looking Ahead
While the trends highlighted in this post offer valuable insights, they also raise critical questions for those engaged in import and export activities. For instance, what strategies can smaller enterprises employ to improve their growth? How should Canadian firms adapt to the changing dynamics of export markets? How might shifts in import trends impact supply chains?
As we move further into 2023, the answers to these questions will shape the strategies and success of Canadian firms in the global trade arena. As an Export-Import Guru, I am here to guide you through these complexities and uncertainties, helping you adapt, thrive and succeed in the rapidly changing world of global trade.
If you're feeling overwhelmed by these shifting dynamics and uncertain about your next steps in the world of import and export, don't worry – you're not alone. Barai Overseas is here to help! We offer comprehensive Export Import Consultation services designed to guide you through these changes, helping you formulate effective strategies tailored to your unique business needs.
Whether you're a small enterprise looking to grow or a large corporation aiming to optimize your trade, our team of experienced professionals can provide you with the tools, insights, and guidance you need. Let us help you navigate the challenging waters of global trade with confidence.
Ready to take your import-export game to the next level? Schedule your consultation with Barai Overseas today, and let's map out your path to success in the world of global trade.