Ontario exports rebound thanks to strong US economy
Ontario exports are set to grow by 7% in 2014 and 5% in 2015 thanks to a strong US economy, says a new report published by Export Development Canada (ECD).
The province’s strong exports will be mainly driven by high demand from the United States for industrial machinery.
Industrial machinery exports from Ontario are forecast to expand by 10% in 2014 and 17% next year.
Ontario’s chemicals and plastics industry will also see healthy growth, EDC chief economist Peter Hall says, due to rapidly expanding US industrial output.
Mr. Hall forecasts 12% growth in the chemicals and plastics industry for 2014, and then 5% in 2015.
Ontario’s second largest sector, mining and minerals, is predicted to expand by 3% in 2014 and 6% next year. Gold mining should have a good 2014 and 2015, although declining commodity prices may undermine future plans for production.
The automotive sector should see exports increase by 8% in 2014 and 3% in 2015, he added. In 2013, this sector represented 35% of the province’s exports.
(Source: “Global Export Forecast – Fall 2014,” page 44, EDC)
Regarding the auto sector, Mr. Hall said:
“Considering the competitive factors and capacity constraints, the sector is continuing to perform well. A lower Canadian dollar and increasing U.S. auto sales will help to support the industry’s growth, but it will continue to face competition from Mexico and southern US states.”
The EDC urges the auto sector to consider a significant investment to prevent capacity constraints that could undermine performance next year.
Forecasts for other provinces:
British Columbia: exports should rise by 10% in 2014, driven mainly by higher lumber sales to the US in light of the housing recovery. In 2015, exports are forecast to increase by 8%.
Alberta: exports are predicted to grow by 17% this year, mainly due to higher crude oil sales to the US. Exports in 2015 should rise by 4%.
Saskatchewan: agri-food and energy exports will help push up figures in 2014 by 9%. Exports should increase by 5% in 2015.
Manitoba: industrial machinery, energy and agri-food will drive a 12% increase in exports for 2014. Exports in 2015 are forecast to rise by 7%.
Quebec: driven by strong figures from forestry and aircraft, exports will grow by 8% in 2014. Metals and ores will help grow exports in 2015 by 9%.
Newfoundland and Labrador: exports are expected to grow by an impressive 28% in 2014, but only by 4% in 2015.
Nova Scotia: will have the best growth, predicted to be a whopping 35%, due in large part to rising natural gas prices. Growth in 2015 is predicted to be just 3%.
New Brunswick: in 2014, exports should rise by 3% and then by 7% next year.
Prince Edward Island: exports in 2014 are forecast to grow by 15% and then by 6% in 2015.