Quebec exports restrained by weak mineral prices: EDC forecast
OTTAWA, Nov. 22, 2012 /CNW/ - Export Development Canada's (EDC) forecast for Quebec export growth calls for gains of 3 per cent this year and a slight acceleration to 4 per cent in 2013.
"Quebec's export numbers are being decimated by weak prices for aluminum and iron ore and flat precious metal prices," said Peter Hall, Chief Economist, EDC. "Output gains in each of these segments paint a totally different picture of activity."
The province's industrial goods sector (metals, chemicals and pharmaceuticals) generates approximately 39 per cent of Quebec's exports. EDC expects just 3 per cent export growth this year and 1 per cent in 2013.
Aluminum exports will gain immediately from resolution of the strike at the Alma smelter, and over the medium-term as Aluminerie Alouette expands production. The fourfold boost in production at Osisko's Malartic mine and the expansion of Agnico-Eagle's LaRonde mine will give a substantial boost to gold production. Iron ore output is set for further growth as New Millennium Iron begins shipping ore from its mine at Schefferville in 2013 with output destined for India's Tata Steel.
Quebec's machinery and equipment sector accounts for more than 13 per cent of the province's total exports, and is forecast to grow by 11 per cent this year and a further 6 per cent in 2013. "Quebec is set to capitalize on a surge of investment spending in the United States," said Hall.
The transportation sector is also important to Quebec's export picture, responsible for 12 per cent of the province's total exports, and it is set to eke out 1 per cent growth this year before rebounding with 6 per cent growth next year. A key driver of this sector is the aerospace industry.
After a slow start, the province's aerospace exports will record limited gains this year and next with business jet deliveries expected to drive most of the growth. Although new commercial aircraft orders have slowed, a backlog of orders will support deliveries over the short term. Bombardier's long-awaited C-Series is now in testing phase, with the plane's first flight planned before end of year, which has the potential to create long-term gains in this industry.
Diversification of Quebec's exports markets continues with growth to emerging markets outpacing that of developed markets for key industries including aluminum, iron and steel and aerospace.
"Despite the fact that the number of exporters in Quebec has declined over the past decade, from 8,108 in 1999 to 8,001 in 2011, the province's share of exports to emerging markets grew to reach 13 per cent in 2011, up from 8 per cent in 2007, and that bodes well for Quebec in the long term," said Hall.
EDC's semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared. The forecast is available on EDC's website at: http://www.edc.ca/gef.
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 7,700 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