China replaces Britain as leading Quebec export market
MONTREAL—China will replace Britain as the second-largest buyer of Quebec’s product next year as demand for base metals continues to drive the economic giant’s growth, according to Export Development Canada (EDC).
Quebec’s exports are expected to grow for the third year in a row, with a seven per cent gain in 2012, according to the agency’s global export focus.
The pace of expansion would put Quebec behind British Columbia (13 per cent), Ontario (10 per cent) and Nova Scotia (nine per cent) in a three-way tie with Manitoba and the Territories, and equal to the national average.
Higher prices for gold and base metals like aluminum and iron ore should mean another good year for this sector.
“Iron ore shipments to China are a huge part of it and that’s not going away, it’s not a flash in the pan, it’s a trend over time, said Peter Hall, EDC’s chief economist.
China is using Quebec’s iron ore to help it aggresively expand its steel-making capacity.
China accounted for 13.6 per cent of the world economy in 2010 when its economy grew by a little more than 10 per cent. Forecasts call for growth of 9.3 per cent and 8.8 per cent in the following two years.
Quebec’s aluminum exports should be boosted by stronger prices this year but production will be flat this year and next, with the only notable increase occuring at Rio Tinto’s Laterriere smelter.
The aerospace sector is also expected to perform well in 2012 as airlines ramp up orders after a couple of years of weak economic conditions.
Hall said the industry will have the beginnings of a recovery as carriers take advantage of order deferrals next year to ensure they get order slots for their planes.
Quebec’s exports are led by four areas—industrial products, which accounted for 39 per cent of total exports, machinery and equipment at 13 per cent, forestry at 13 per cent and transportation at 12 per cent.
The province is the third-largest exporter in Canada after Ontario and Alberta, accounting for 15.4 per cent of national exports at $57.8 billion.
After growing by 2.6 per cent in 2010, Quebec’s exports are expected to increase by four per cent in 2011 and seven per cent in 2012.
EDC expects Quebec’s forestry sector exports will grow by nine per cent in 2012 after two years of zero gains.
Most of Quebec’s lumber is shipped to traditional markets like the U.S. while western lumber is increasingly going to China.
Increasing exports won’t have an immediate impact on job creation, which tends to lag recoveries by about six months, Hall said.
“Sadly, jobs always lag the recovery so it’s going to take a while for this growth to actually turn into jobs.”