A politics-fueled government shutdown in the U.S. will have very real impacts for Nanaimo manufacturers.
Stock markets have cringed and fallen after U.S. lawmakers were unable to reach agreement on a short-term funding bill for the federal government by the deadline of midnight at Tuesday.
Republicans in the House of Representatives sought to tie funding for the government to progressively watered-down restrictions on the Affordable Care Act, also known as Obamacare, a key health care reform championed by the president. However, the Democratic-controlled Senate blocked the move. But the consequences of the political struggle are not limited to people living below 49th parallel.
Colin Dobell, president and CEO of Inuktun Services Ltd., said 65 per cent of his company's business was in the U.S. between October and December of last year. From April to July this year, that figure shrank to about 20 per cent of revenue as a U.S. budget sequester took effect. Now, he said, the latest news from the U.S. has caused sales to begin to dip once more.
"It was just starting to pick up again (in the) August/September timeframe, and now it looks like stuff is all going to get pushed off again because they're effectively shutting down," Dobell said. "These things have a big effect on us for sure."
The robotics company deals with contractors such as the U.S. Army Corps of Engineers and has already seen business opportunities in the U.S. worth hundreds of thousands of dollars postponed indefinitely, possibly permanently, he added. Dobell said he anticipates the trends will get worse, but said Inuktun has spared itself pain by diversifying elsewhere.
Lurene Haines, a marketing director at Vehicle Mounted Air Compressors in Nanaimo, says her firm does business with a number of local and state governments.
The company manufactures air compressor units and other equipment. She said the shutdown will likely mean a slowdown in orders.
"It may be negligible, because we don't just have government customers," she added.
"We are kind of diversified, which of course protects us a little bit when there's situations like this, but there's no way everybody can't be impacted by a shutdown like that, because it all trickles and you know, spins out across the economy. So everybody gets impacted." The company mainly works with dealers for local and state jurisdictions. She said the shutdown could result in delays on "significant" contracts.
"It wouldn't impact the number of sales we have, but it could definitely impact the timings, and for us that can be a 'make or break,'" Haines said.
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