Food In Canada

Ontario, British Columbia export growth to outdo Canada’s average

By Staff   

Exporting & Importing Export Development Canada forecast

Export Development Canada: national exports to grow 12 this year

OTTAWA: Canada’s export growth is forecast to ring in at 12 per cent in 2010 but decelerate to six per cent in 2011, according to Export Development Canada (EDC)’s recent forecast.

The forecast puts Ontario as the only province, other than British Columbia, where exports will outperform the national average this year and next.

International exports in Ontario will grow by 14 per cent in 2010 and seven per cent in 2011.

“There were many who considered Ontario exports a write-off only a few months ago, but the auto sector has experienced a remarkable about-face, and exports of industrial goods are also in the double-digit growth zone,” said Peter Hall, EDC chief economist.


Auto sector to reap rewards of US demand

The auto sector, making up 29 per cent of Ontario’s total exports, is forecast to grow by 43 per cent in 2010 and a further 10 per cent in 2010

Hall said the sector is still struggling with recession-induced credit challenges and a higher-cost operating environment, but it will still enjoy strong demand from US OEM’s, which are also experiencing robust growth rates.

“Price pressures remain, but overall shipments of motor vehicles and parts look good through 2011,” he said.

In the wake of the recession, the industrial goods industry sector has claimed top spot among Ontario exports at 32 per cent of the total. The EDC forecast calls for export growth of 15 per cent in 2010 and four per cent in 2011.

“Steel capacity has been coming back online cautiously this year. Rebounding demand in North America coupled with strong sales to Brazil will lead to double-digit increases in shipments this year. Next year’s growth will be constrained by a weak price environment,” Hall said.

The machinery and equipment industry is the third largest export sector in Ontario, accounting for 17 per cent of the province’s total. After falling 20 per cent in 2009, the sector will be hit by a further 10 per cent reduction this year before seeing a modest rebound of seven per cent growth in 2011.

A different story for Ontario’s neighbor

Quebec’s exports will stay below national averages, growing four per cent in both 2010 and 2011.

The industrial goods sector will grow by 19 per cent in 2010 and five per cent in 2011.

“Last year, Quebec’s aluminum industry was pummeled by the global recession,” Hall said. “Prices have recovered substantially since then, and production gains further augmented sales. Future growth prospects are bright as the automotive industry shifts to lighter, aluminum-based vehicle parts,” he said.

Machinery and equipment exports, after suffering a 22 per cent drop in 2009, will shrink by a further eight per cent this year before climbing by a modest seven per cent rebound in 2011.

The province’s forestry sector exports are forecast to grow by 14 per cent in 2010 and five per cent in 2011.

“The outlook for the paper and pulp industries remains largely unchanged, with world demand conditions weighing on the sector through 2011,” Hall said.

Demand for new planes to take off slowly

Quebec’s transportation sector, largely comprised of aerospace products, accounts for just over 14 per cent of the province’s export total. EDC expects the industry’s export earnings to fall by 17 per cent this year and post no growth in 2011.

“The time lag between orders and deliveries in the aerospace industry, usually 12 to 18 months, will result in falling export sales in both years of our forecast, before growth returns in 2012,” Hall said.

But as traffic regains momentum in the coming years, demand for new planes will rise. The commercial jet segment stands to see the most growth over the medium term, thanks to revived demand and the need to replace aging fleets.

East coast forecast

Newfoundland and Labrador exports will rise nine per cent in 2010. Industrial goods, comprised largely of iron and other ores, will record the highest growth rate.

Prince Edward Island’s trade sector is facing a seven per cent contraction this year. Better pricing for agri-food products will drive a rebound in 2011, when exports will expand by five per cent.

Overall exports out of Nova Scotia will contract one per cent this year, before experiencing a bounce-back of 10 per cent next year with the start-up of Deep Panuke and positive export trends for tires and forestry-related products.

New Brunswick exports will rise 25 per cent this year, with higher prices for key commodities and the first full year of production at the LNG regasification plant. Potash exports also brighten the outlook, but in 2011, lower prices for refined petroleum products and pulp will limit export growth to three per cent.

Western outlook

Manitoba’s export sector will see a muted recovery from last year’s shock, with international sales declining two per cent this year, followed by a six per cent rebound in 2011. Agricultural machinery and equipment have yet to recover from the global downturn, and it will take time to get exports back to pre-crisis levels.

Saskatchewan will see a seven per cent increase in exports in 2010 and a nine per cent rise in 2011. While the province’s exports of grains and oilseeds were dampened by extreme wet weather conditions, a surge in energy and fertilizers more than made up for it. food. Rising commodity prices have helped boost export earnings.

Alberta’s energy, chemicals, and forestry products exports will record solid double-digit growth rates this year but, in nearly all cases, export levels will remain well below previous peaks. Overall export growth will ease from 16 per cent to five per cent, with industrial goods and machinery and equipment to be the strongest performing sectors.

British Columbia’s forestry, energy and metal mining sectors will provide a boost to exports, with higher prices and expanded capacity. Overall exports will rise 13 per cent in 2010, followed by another 10 per cent in 2011, thanks to factors such as ongoing development of shale gas fields, the reopening of previously idled pulp mills, and better prices for most key commodities.

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