Thanks to the strength of its forestry and agri-food sectors, B.C.’s exports will grow both this year and next, according to Export Development Canada’s semi-annual Global Export Forecast. The successes in these sectors, however, are being offset by a slowdown in the Chinese economy and weak prices in the energy and mining sectors. The result is a modest two per cent increase in overall exports in 2016, followed by 5 per cent growth in 2017.
“In the past, B.C.’s export performance was tied to key Asian markets. Now the growth is a little closer to home, with U.S. demand and the low Canadian dollar providing opportunities for exporters,” said Peter Hall, EDC’s Chief Economist.
Forestry, B.C.’s largest-export sector, is expected to grow by four per cent in 2016. Accounting for more than one-third of B.C.’s exports, this sector’s success is being driven by the U.S. economy and continued growth in U.S. housing starts. While the forestry sector will see its volumes impacted by the mountain pine beetle infestation, EDC expects that higher prices will result from these supply constraints, leading to a seven per cent increase in the sector’s exports in 2017.
Agri-food exports, as well as metals, ores, and other industrial products, are also having a strong 2016. Helped by the lower Canadian dollar and healthy harvests, agri-food exports are set to grow by seven per cent in 2016. Exports of metals, ores, and other industrial products will increase by four per cent.
B.C.’s exports in the energy sector will decline by 10 per cent this year. However, with this sector making up less than one-fifth of the province’s exports, B.C.’s overall export growth picture won’t face the same setbacks as provinces with a heavier reliance on energy exports.
“The top line numbers for B.C. might not look so great, but that’s because of the energy sector, which is masking the growth in other sectors. Export diversity in B.C. is the reason for overall growth in 2016 and the positive outlook for 2017,” adds Hall.
Mr. Hall is discussing export prospects for B.C. and also for Canada as a whole today at EDC’s Exporting Unleashed 2016 event at Vancouver’s Fairmont Waterfront Hotel. This event is being held in partnership with Canadian Manufacturers & Exporters (CME).
“There are opportunities out there for exporters today, and more still are coming fast in 2017,” said Hall.
“China and India both have a fast-growing middle class, and U.S. consumers and businesses have money to spend. We think that now, during this down period in the global economy, is the time for B.C. exporters to plan for and capitalize on international opportunities. Growth is coming, it’s just a matter of being well-positioned when it arrives.”
Over the next month, Hall will travel across Canada for EDC’s Let’s Talk Exports tour, which offers insights on the current global economy and explores how economic trends will impact Canadian exporters.
Visit EDC’s Global Export Forecast: Spring 2016 to learn more.
