Global Trade 21: 'Economic shock as big as the war ' - RSM experts

Greater Birmingham Chambers of Commerce staged a major online global conference that examined a range of issues, including those provoked by the Covid-19 crisis and Brexit.

The conference, sponsored by Birmingham City University, DykeYaxley and Lemonzest, was hosted online from the Chamber 's headquarters in Edgbaston by chief executive Henrietta Brealey, Mandy Hague, director of the Chamber 's international business hub and Stef Bowes, international business manager at the Chamber.

An extensive range of issues was discussed by the speakers, who included the UK 's minister for exports Graham Stuart, representatives of the United States, Canada and Qatar, economists from Birmingham global accountancy firm RSM as well as experts from Birmingham City University and city business leaders.

Here, ChamberlinkDaily reporters Jessica Brookes, Claudia Congrave and John Lamb examine the major issues discussed from around the world and closer to home.

The UK is facing an economic shock “as big as the war ” but can emerge from it with a better outcome, a leading economist told the on-line conference.

Joe Brusuelas (pictured), chief economist at RSM, the global accounting firm, was speaking in a joint presentation with his colleague Simon Hart, international partner at RSM, on the global economic impact of events in the past year.

Addressing whether the Covid-19 pandemic had masked the impact of Brexit, Mr Brusuelas said: “My impression is that the pandemic brought forward a lot of the Brexit issues that you would have had over a number of years into just 15 months.

“The UK economy has gone through the biggest shock than it has in a couple of centuries.

“This is as big as the war and the data sometimes says it 's worse. There are going to be some real challenges but one gets the sense that Brexit is in the rear view mirror. I think that 's a good way to rediscovering the UK economy and re-imagining UK firms in the post-pandemic situation. But tensions will go away.

“This is starkly different from what we saw in the great financial crisis and you are going to get a better outcome. Fresh diplomatic initiatives will smooth out some of the tensions - simply because it 's in everybody 's interests to do so. ”

Mr Hart said: “There is no doubt that Brexit has had an impact on the UK economy. It has been masked by the pandemic and maybe that 's not a bad thing in many respects. There will be an on-going evolution of the relationship. ”

Both felt that there was going to be a post-pandemic boom in global activity but the ability of businesses to recover from the constraints on production during the crisis was critical.

Mr Brusuelas said: “As we emerge from our cocoon we are going to see a burst of economic activity. This was a once-in-a-100-year event and the recovery will largely be led by households and business who are trying to pull forward about 10 years of technology to prepare to compete in a hyper-combatable post pandemic economy.

“Until we get about 60 per cent of the global population vaccinated we are not going to get the pre-pandemic economy back. Until we do you should expect to see twists and turns but the direction will be up. It might be one step forward one step back for a while.

“In some of the government institutions we seem to be going through cold war planning and the difficulty of getting supplies from overseas has been quite pronounced as businesses re-evaluate their supply chain risks. ”

He added that businesses need to jump start supply chains but the risk of inflationary pressure might mean that “things are going to get a little too warm too quickly ”.

Mr Hart speculated if this meant that the global economy was entering “boomtown ” and whether there was really going to be a sustained bounce-back of the post-pandemic global economies.

Mr Brusuelas said that “some economies may over-heat and push consumption even higher but this may be a bit over blown. ”

With cheap borrowing available, they felt this was the time to invest. “Interest rates are not going to rise any time soon and this will release pent-up demand. Solid business investment is going to be the leader for a way out of this. ”

Examining data that showed Marseille and Stockholm were leading the return to work in Europe, Mr Hart pointed out that Birmingham was lagging behind in this respect.

In the same session, Yael Lempert, the US Embassy,Charg� d 'Affaires, said the US administration is “going to be highly focussed on strengthening the relationship between our countries and encourage companies to flourish on the global stage ”.

She added: “And we want foreign companies to be able to flourish and succeed in our market - the biggest consumer market in the world.

“We are not afraid of competition - we welcome it. And that 's a point we have made repeatedly. We want to see a level playing field and we want that to bring benefits to all.

“And when it comes to business relationships in the US they don 't come much closer than the United Kingdom, our biggest investment partner of all.

“Over the past year we have seen our seen our trade and investment numbers dip in the pandemic and we want to reverse that as quickly as possible. And we are already seeing some really positive signs that this is happening.

“Our team at the US Embassy look forward to continuing to work with the Greater Birmingham Chambers of Commerce and individual businesses and organisations as our countries come back stronger and greener even better than before. ”

Ralph Goodale, High Commissioner at the Canadian Embassy, told the conference 's global audience that Canada and the UK have “an extraordinary relationship rooted in hundreds of years of shared history ”.

He added: “Our bilateral relationship is forward-leading and mutually advantageous. Overall the UK is Canada 's fourth largest trading partner in goods and second largest in services. The annual value in that two-way trade exceeds $40 billion.

“The UK is Canada 's second largest destination for investment abroad and our third largest source.

“The similarity of our business cultures and the relative ease of doing business in both our countries have helped on both sides of the Atlantic to keep commerce moving successfully despite the disruption caused by Covid-19 or the dynamics of Brexit.

“This Birmingham conference is a good example of how the world has changed from even the very recent past. You have gone digital this year as you did last year and you have extended your global reach, attracting a larger audience than ever before. ”