Quebec exports will be strong in 2015: EDC
Strong economic forecast built on rising US demand, weak loonie.
MONTREAL — Key sectors such as forestry, metals, and aerospace will drive Quebec’s export growth by 8% this year, and add another 9% next year, according to an Export Development Canada (EDC) forecast.
The Ottawa-based export financing agency says forestry is the biggest mover with 15% growth thanks to strong housing demand in the US and a weak Canadian dollar. Lumber is a strong performer, while pulp and paper continues its decline as newsprint and other paper products are phased out in favour of digital alternatives.
“There is tremendous pent up demand right now in the US, especially in the housing sector, which bodes well for Quebec lumber,” said Peter Hall, EDC’s chief economist. “Builders are not keeping pace with rising demand, so every day the US is adding to its sizable housing deficit. It will take a lot of wood to help them climb out of that hole, so Quebec’s abundant supplies and a cheaper Canadian dollar are positioning the province to cash in on the bonanza.”
Forestry’s solid performance will continue next year, with 9% growth, but will be overtaken by the metals and ores sector, which is projected to see 10% growth next year.
Metals and ores account for the largest share of Quebec’s exports, at 26% with increased aluminum output in 2014 and 2015 from smelters, and higher demand in the US.
“We expect aluminum to champion this sector in the coming years, in part because of its increased use in automobiles. Just this year we saw Ford introduce an all-aluminum-body pickup truck, a very encouraging development for Quebec smelters,” said Hall.
He says Quebec’s re-launch of the ‘Plan Nord’ might not factor into our forecast for 2014-2015, it will likely have a positive impact on the metals and ores sector in the near future, as new mining projects in Quebec’s northern reaches come online.
The aerospace sector will also see 10% growth in exports next year, fuelled by the weak Canadian dollar and steady international demand.
Other factors contributing to this growth are improved private sector financing conditions in developed economies, increasing demand from emerging economies such as Indonesia and China, and carriers looking to upgrade to more efficient fleets to combat high jet fuel prices.
Click here for EDC’s Global Export Forecast.