Manufacturing to outpace economy
Exports will climb by 10 per cent: CME
TORONTO—The improving US economy and more business spending north of the border will make it a good year for Canada’s manufacturing sector, according to the 2011 outlook from Canadian Manufacturers and Exporters (CME).
The forecast says Canada’s export production will expand by at least 10 per cent this year, fueled mostly by the US economic recovery but also stronger markets globally.
In Canada, lower tax rates on investment and increased business profits will boost capital spending on machinery and equipment by an estimated 16 per cent.
That’s good news for Canada’s manufacturing sector, where production levels will rise by five per cent and sales will increase 7.5 per cent, the outlook said.
In fact, increases in Canadian manufacturing and exports will outpace the country’s economic growth.
With less consumer demand, housing construction and government spending, Canada’s real GDP is forecast to rise by just 1.5 per cent to 2.0 per cent.
But some factors could boost the country’s economic growth, the CME said.
If the US economy recovers more quickly than expected, that’ll increase demand for Canadian exports and soften upward pressure on the loonie. And a faster recovery is looking more likely.
Growth in Alberta’s oil sands and other energy developments could also fuel both business investment and demand for manufactured goods.