Canadian exporters will experience increased challenges this year and next, says the semi-annual Global Export Forecast released in late April by Export Development Canada (EDC).
Blame it on America. The U.S. economy is beginning to slow, which will set in motion a domino effect that will ripple from sector to sector and country to country, moderating global economic growth through 2006 and 2007.
“When the U.S. sneezes, everybody catches cold these days,” says Stephen Poloz, EDC’s chief economist and senior vice-president of corporate affairs. “The economic dominos have begun to fall, led by moderations in the U.K., Australia and now the U.S. When combined with persistently high oil prices and a strong Canadian dollar, this will prove challenging for the Canadian exporter.”
EDC is forecasting global economic growth of 4.3% in 2006 and 4.1% in 2007, down from 4.5% in 2005.
EDC predicts the global slowdown will almost stall Canadian export growth. Canada’s exports of goods and services will rise by 3% in 2006 and just 1% in 2007, down from last year’s pace of almost 6%.
But at least Newfoundlanders need not worry, with export growth in Newfoundland and Labrador expected to reach 7% in 2006 and 10% in 2007. While the prospects for New Brunswick (8% and 3%) and Manitoba (7% and 2%) aren’t stellar, they will enjoy more robust growth than Quebec (4% and 0%), British Columbia (1% and 0%) and Ontario (1% and -1%), where manufacturing activity is concentrated. Find out how the rest of the provinces fare here: http://www.edc.ca/english/docs/Provoutlook_e.pdf.
Forestry, automotive and consumer goods will be the sectors hardest hit. Energy, advanced technology, agri-food and aerospace will enjoy continued growth.
To read the full report, go to http://www.edc.ca/english/docs/ereports/gef/country_information_EFindex.htm
