VICTORIA AND VANCOUVER, May 16, 2013 /CNW/ - Back-to-back double-digit increases will vault British Columbia's international exports to the top of the growth charts over the next two years, according to Export Development Canada's (EDC) Global Export Forecast.
EDC's Chief Economist, Peter Hall, was in Victoria this morning for a breakfast presentation to members of the Chamber of Commerce and in Vancouver for a lunchtime speech with the Board of Trade to deliver EDC's provincial export forecast, where he predicted B.C.'s exports will grow by 11 per cent in 2013 and a further 12 per cent in 2014.
"British Columbia's exports are on track for a vibrant expansion, sharing top spot among the provinces with Nova Scotia," said Mr. Hall. "B.C. is enjoying an exceptional recovery in forestry and very strong gains in ores and metals. Following recent ups-and-downs, B.C. is in an international sales sweet spot this year and next."
The forestry sector accounts for approximately 32 per cent of the province's international sales, the largest share of B.C.s total. Mr. Hall predicted that provincial exports of forestry products will grow by 25 per cent in 2013 and another 17 per cent in 2014, this after only 2 per cent growth in 2012.
"Forestry exports are set to experience impressive growth, with demand and prices for lumber driven upwards by rising U.S. housing starts that are expected to expand by 34 per cent in 2013 and 24 per cent in 2014. Those are big numbers," said Mr. Hall. "The recovery of China's construction sector will also add momentum. Looking forward, though, supply constraints will start to emerge after 2014, suggesting potential for significant investment in lumber capacity."
The energy sector is also an important contributor to the province's export picture, accounting for 27 per cent of total international sales. EDC's forecast predicts a 4 per cent decline this year, ahead of 10 per cent growth in 2014.
Coal, the largest subsector by far, is being hard hit by the sharp price declines that took hold late last year," Mr. Hall said. "We expect coal exports to shrink 12 per cent this year. At the same time, natural gas will benefit from higher prices through 2014, but volumes will decline as producers find it very hard to compete with lower-priced U.S. shale gas. Significant long-term growth is expected only once sizable LNG terminal capacity comes online."
Industrial goods (metals and ores) contribute 20 per cent of the province's total exports. "B.C.'s recent mining expansions will drive strong, double digit gains for each of the next two years," Mr. Hall continued.
EDC's forecast also noted that the U.S. recovery that is taking shape will mean solid growth for the province's machinery and equipment producers and agri-food sales through 2014.
Nationally, Canadian merchandise exports are forecast to rise 9 per cent in 2013 and 5 per cent in 2014, while economic growth (GDP) is expected to rise 2.2 per cent this year and 1.9 next year. EDC is forecasting global growth of 3.5 per cent in 2013 and 4.2 per cent in 2014.
EDC's semi-annual Global Export Forecast addresses the latest global export conditions including market- and sector-specific insights to help Canadian exporting companies grow their international and minimize risk. It also analyzes a range of risks for which exporters should be prepared. Read EDC's Global Export Forecast.
EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 7,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.
SOURCE Export Development Canada