Coronavirus trade slowdowns like 'an anaconda squeezing' for Manitoba businesses, says manufacturers' group
Small businesses could suffer most from coronavirus hit to the economy, HR expert says
It was a simple enough order: 10 metal door hinges.
But for Winnipeg business owners Jocelyn and Fred Perrier, it was also the first glimpse of how far the effects of factory shutdowns in China have travelled since the novel coronavirus was first detected there.
Jocelyn Perrier, who co-owns door manufacturer DoorTech with her husband Fred Perrier, said the hinges they ordered for a customer were supposed to arrive in February. Perrier said she was stunned to hear they would be held up for another month because the Chinese factory where they were supposed to be made was still closed.
"[I was] very surprised," she said. "It's a hinge, so you never relate the two or never think about that sort of thing."
Across the province, business owners like the Perriers have started to feel some of the ripple effects the pandemic is having on international trade, says Ron Koslowsky, Manitoba vice-president of Canadian Manufacturers and Exporters.
Koslowsky said those effects are mostly subtle right now — like companies experiencing product shortages and having to find new suppliers — but they could be more drastic down the road.
"If this continues, and internal inventories are depleted, there are going to be more and more cases of companies that are saying, 'We don't have work for you today or tomorrow,'" he said.
With businesses still reeling from delays caused by railway blockades and trade wars, the slowdowns related to the COVID-19 outbreak are hitting especially hard for Canadian importers and exporters, Koslowsky said.
"It's one thing on top of another, and this is just yet one more 'you've got to be kidding me' kind of scenario that our companies are facing," he said.
"It's not a dramatic, one-company story, but it's a rolling, almost an anaconda squeezing effect which slowly strangles the business and [its] ability to be competitive and keep growing."
Small business could suffer
That effect will hit small businesses especially hard, said Barbara Bowes, president of Winnipeg-based human resources consulting firm Legacy Bowes Group.
She said the suggestion to have employees work from home is a good idea, in theory, to limit possible exposure to the virus in areas with detected cases of COVID-19. But Bowes said many small companies won't have the technology and infrastructure to make it work.
"My office is fully set up with [a virtual private network] so I can work at home and hook into the main drive in our computer in the office," Bowes told CBC's Information Radio host Marcy Markusa.
"I would suggest that 90 percent of small businesses don't have that."
She said the measures the federal government introduced last week — including waiving the one-week waiting period to claim employment insurance and doubling the time business can use the federal work sharing program to avoid layoffs — are a good start.
But Bowes said the amount of paperwork needed to apply for those programs can be enough of a deterrent to make businesses already facing hardship not bother trying.
Chris Bachinski, president of GHY International, said his clients are just starting to see the impacts of the virus.
"This is a ripple effect," said Bachinski, whose company helps co-ordinate North American imports and exports through customs. "I still think we have a few more months to see how this is going to hit us.
"Even if the factories in China open tomorrow, it's still going to take a long time for them to catch up which will make manufacturers and retailers run much more lean in their inventories and it could hurt their sales."
In the meantime, people like the Perriers will have to wait and see what happens.
Fred Perrier said most of DoorTech's suppliers are Canadian, so they're not yet worried about whether the virus will affect their business in the long run — but they're keeping a close eye on the situation.
"There might be other hiccups somewhere down the road. We don't know. We hope that they are able to resolve this thing and we carry on," he said.
With files from Marcy Markusa and Leif Larsen