Canada’s exports to grow 2% in 2016, Ont. and PEI lead at 7%: EDC
Auto, aerospace and consumer sectors to power growth nationally.
EDC chief economist Peter Hall says the optimistic outlook is based on expectations of double-digit expansion in exports by the automotive, consumer goods and aerospace industries.
On the flip side, Hall also projects a double-digit contraction for energy exports in 2016 as the commodity sector continues to struggle in a low price environment.
Hall says higher US demand and the weaker Canadian dollar have helped boost sales in several important industries. His report says early 2016 numbers suggest sectors like agri-food, forestry, advanced technology and industrial machinery are set to expand this year.
The outlook predicts exports of consumer goods to expand 14%, aerospace to grow 13% and automotive by 10%. Exports are expected to contract 1% in the chemical and plastics sector, 5% in fertilizers and 14% in energy.
Hall says exporters should continue to benefit from the lower loonie through 2016, even though the dollar’s value has crept back up from recent lows.
“The US economy is powering up and spreading its growth to the rest of the world, which is the main cause for Canada’s surging exports in the transportation and consumer goods categories,” Hall said.
Ontario and Prince Edward Island will lead all provinces with 7% growth in exports this year, thanks to a resurgent auto sector, high demand in the US and the low Canadian dollar.
Ontario’s automotive sector, which accounts for nearly 40% of the province’s exports, will grow by 10% this year, bolstered by a record-high demand for light vehicles in the United States. Exports of industrial machinery and equipment will rise 9%, while shipments of metals, ores and other industrial products are expected to grow by 5%.
The report says exports from Prince Edward Island are expected to grow by 7%, thanks to the aerospace industry.
At the other end of the scale, the EDC predicts exports from Newfoundland and Labrador will drop by 11% and by 10% in Alberta due to continuing low prices for natural gas and crude oil.
The same factors are also expected to cause a 6% drop in exports from New Brunswick and 3% shrinkage in Saskatchewan despite strong performances by non-energy industries. The EDC predicts also exports will rise 6% in Nova Scotia, 5% in Quebec, 4% in Manitoba and a modest 2% in British Columbia.
© 2016 The Canadian Press