VANCOUVER, May 21, 2015 /CNW/ - British Columbia's (BC) export diversification, both in terms of sectors and the markets they sell to, will act as an insulating force against falling energy prices and help the province to 5 per cent export growth this year, followed by six per cent growth in 2016.
"Industrial and destination diversification are rescuing BC exports from the effects of plunging commodity prices," said Peter Hall, Chief Economist, EDC.
"Since 2000, BC has led all provinces in growing their share of sales to emerging markets, from 7 per cent to 30 per cent in 2013. That's not just to China, but to a wide number of non-OECD nations. At the same time, 50 per cent of their sales are still headed to the US market, so the growth boom south of the border is also working to BC's advantage."
Forestry exports in particular, which account for the largest share of the province's exports, will get a boost from US growth. It is estimated that housing starts will hit 1.35 million units this year, boosting demand for lumber. Couple this demand with the low Canadian dollar and it is estimated that BC forestry exports will grow by 9 per cent in 2015, more than any other sector.
That growth, however, is expected to slow to four per cent in 2016 due to decreased supply, stabilization of the loonie, and subdued demand from China – a result of cheaper lumber availability from Russia.
Metals and ores, which saw double-digit growth in 2014, will continue to expand, reaching 7 per cent growth in 2015 and 8 per cent in 2016 – impressive, given that global prices are dropping. New mines and production facilities are pushing this sector upward.
"The commodity story in BC is very strong, but there is a lot more going on in the economy that contributes to the province's positive outlook," said Hall. "We don't really talk about sectors like high tech, processed foods, media arts, and other services because their share of activity is lower. But they're growing, and together are becoming a more substantial portion of the economy."
"Also looking at the bigger picture, global trade is ramping up which means that greater volumes of goods are in need of transportation. With its world-class port system and access to the more promising emerging markets, such as China and India, BC is well situated to benefit from increased trade flows both in and out of Canada," added Hall.
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 sales. It also analyzes a range of risks for which exporters should be prepared.
EDC is Canada's trade finance agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.
For more information about how EDC can help your company, visit www.edc.ca
SOURCE Export Development Canada