WINNIPEG—Export Development Canada (EDC) has a rosy forecast for Manitoba’s export growth in 2013, expecting the province to have a gain of 7% next year after a 5% gain this year.
“The long-awaited US recovery and a strong global agri-food market will boost demand for Manitoba exports next year ahead of national average growth,” said Peter Hall, Chief Economist, EDC.
“In spite of the strong Canadian dollar, Manitoba’s manufacturing sector is on a tear, with rising sales in a number of key sectors, including aerospace, buses and agricultural equipment. This performance is no doubt aided substantially by its superior industrial and regional diversification.”
Global recession has eroded about 10% of Manitoba’s export sector, with the number of exporters declining from 1,263 in 1999 to 1,156 in 2010.
But the province retained a relatively high level of exports to emerging markets, between 20 and 23%, Hall added.
“This continued diversification is an important factor in the province’s continued export strength. Next year’s gains will be by rapid emerging market sales and revived U.S. growth, giving exporters the best of both worlds.”
Manitoba’s exports depend on the agri-food, industrial goods and machinery/equipment sectors, which together account for 75% of the province’s total international sales.
The equipment and machinery sector accounts for 12% of the province’s total exports, and will see impressive 9% growth next year after a 17% gain this year.
“We expect a surge in sales agricultural machinery, as higher food prices spur investment in farm operations around the world.”
The agri-food sector generates over 36% of the province’s total exports. EDC expects agri-food exports to jump by 14% next year after a 12% jump this year.
Manitoba’s industrial goods sector accounts for more than 27% of the province’s total exports, but is forecast to decline by 3% next year, following a 12% drop in 2012.
“This year’s drop is mainly due to a sharp decline in copper exports following the closure of the Trout Lake Mine. Despite disappointing near-term numbers, mining is ramping up for a big expansion,” said Hall. “At the end of next year production will commence at Hudbay’s Lalor Project, and at their new mine at Reed Lake, bringing a strong rebound for metal exports in 2014.”
“The transportation sector will be the star performer, with the aerospace industry seeing a surge in exports of aircraft parts by Boeing Winnipeg as production of the 787 Dreamliner ramps up,” added Hall. “Shipments of buses are also up a stunning 40% so far this year, benefiting from improving economic conditions in the US.”
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.
View the full report here.