Market Insights – North America

A new insight report by trade credit insurer Atradius shines the spotlight on North American markets, providing an inside track for any business trading in the region.

The country report focuses on the United States, Mexico and Canada (USMCA) region, detailing the political and economic landscape alongside an insolvency forecast and performance outlook into key industries.

The US

Within the report, 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.


Mirroring 2019, Canada’s GDP growth for 2020 is expected to remain below its long-term trend due to sluggish domestic demand and lower export growth. GDP growth is forecast to be 1.4% in 2020 and 1.6% in 2021, down from an expected 1.7% for 2019. Global economic uncertainty and ongoing trade tensions continue to dampen business sentiment and investment activity in most sectors, apart from the energy industry, while export growth is hampered by the slowdown in the US, Canada´s main export market. More positively, the new USMCA agreement has reduced trade policy uncertainty. Together with Mexico, Canada is shielded from any global tariffs on cars that the US might impose on national security grounds by means of a tariff-free quota well above current export levels. However, due to the modest economic growth and increased business uncertainty, corporate bankruptcies are expected to increase 6% in 2019 and 2% in 2020 after several years of annual decreases.


GDP growth in Mexico has averaged at just 2.5% since 1994, mainly due to low investment

and weak productivity. However, GDP is forecast to level off in 2020 with growth limited to around 1.0%, due partly to fiscal austerity and also a slowing US economy. While Mexico’s economy is generally diversified, it remains closely synchronised with the US business cycle with the US accounting for more than 75% of exports. Increased uncertainty – partly stemming from policy and trade issues with the US – has led to lower private consumption, a weakening of business sentiment and a contraction of private investments and factory activity. Despite the ongoing economic policy uncertainties, the report argues that Mexico appears to be fairly resilient, and a steep deterioration of the economy is considered unlikely due to strong economic fundamentals.

Darren Power, Regional Manager for Atradius’ Northern Regional Hub, said: “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. As in your home market, the macroeconomic factors can have a significant impact on your customer’s financial health and ability to trade. 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.”