Apr. 26, 2015 – A report by Export Development Canada (EDC) finds that Ontario’s export growth will lead the country this year before a recovery in oil prices in 2016 restores the fortunes of energy-producing provinces like Alberta.
After years of challenges, exports in Canada’s manufacturing heartland are forecast to grow by 10 per cent to $195 billion following last year’s eight per cent growth, courtesy of strong demand from a strengthening U.S. economy and a weaker loonie.
The EDC said the increase will be driven by pent-up U.S. demand for automobiles and industrial machinery.
Ontario is forecast to move from best to worst in 2016 when its predicted two per cent growth will trail far behind Alberta and Newfoundland and Labrador, whose exports are expected to grow 19 per cent to $120 billion and $13.3 billion respectively.
The agency forecasts Canada’s exports, which grew by 10.9 per cent to reach $586.8 billion in 2014, will increase by just one per cent this year and seven per cent in 2016. The value of energy exports is forecast to drop 23 per cent to $109 billion in 2015 even though volumes will rise modestly, and then grow by 23 per cent in 2016.
Quebec is expected to pump out solid export growth mainly from its aerospace, automotive parts and forestry sectors.
Aerospace is expected to lead with 17 and 20 per cent growth over the next two years, helped by the entry into service of Bombardier’s CSeries aircraft. Metals and ores will see modest growth despite weaker prices, while lumber exports are forecast to rise six per cent on higher U.S. housing starts.
Agricultural and food exports are tapped to rise eight per cent in 2015 to $60.8 billion. Stronger demand particularly from Asia’s growing middle class is expected to boost seafood exports by 17 per cent in 2015 on higher prices for lobster and crab.
Exports are forecast to slip in 2016 because of capacity constraints after years of under investment in Canada, especially in the automotive and machinery sectors, the EDC said.
— With files from Ross Marowits, The Canadian Press
