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Quebec exports riding high on soaring commodity prices says Export Development Canada


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After lackluster performance last year, Quebec's international exports are forecast to grow by 12 per cent this year, followed by a further 6 per cent in 2012, according to a Global Export Forecast by Export Development Canada (EDC).

 

"Higher commodity prices are the main driver of double-digit growth of Quebec's exports this year ," said Peter Hall, Chief Economist for EDC, to an audience of 170 at the Omni Hotel Mont Royal in Montreal. "A cyclical recovery in U.S. demand will boost the province's beleaguered manufacturing industries, with aerospace driving export growth in 2012."

 

The province's international export picture is led by four key sectors:

* Industrial goods, accounting for 38.7 per cent of the province's total exports;

* Machinery and Equipment, accounting for 13.4 per cent;

* Forestry, accounting for 13.2 per cent; and

* Transportation, accounting for 12.3 per cent.

 

EDC forecasts Quebec's industrial goods sector will grow by 19 per cent in 2011 before flattening out in 2012. The outlook is shaped by price fluctuations, strong demand from emerging markets, and higher US industrial activity.

 

China became the number one foreign destination for Quebec's iron ore exports last year, as shipments from Bloom Lake signaled the beginning of production destined solely for the Chinese market. New Millennium's Schefferville DSO project will provide a further boost to the volume of shipments over the forecast horizon, with ore from this project destined for Tata Steel's European operations.

 

Aluminum, an important segment of the industrial goods sector, is positive for 2011. Stronger demand from the auto sector and a growing list of copper-substitute applications will combine with high prices to create healthy near-term export sales.

 

Prices are expected to average USD 2,400/tonne in 2011, with some weakening anticipated next year.

 

The chemicals industry will continue to post healthy export growth this year but the high Canadian dollar, U.S. protectionist sentiment and mounting competition from Middle East and Asian producers will continue to prove challenging.

 

EDC believes that exports from Quebec's forestry sector will grow by 7 per cent in 2011 and a further 8 per cent in 2012, as the U.S. housing market begins to recover and residential construction activity resumes.

 

The aerospace sector's exports will see a turnaround this year and shipments are expected to surge in 2012. Aerospace exports to emerging markets will outpace those to developed economies, and EDC expects this trend to continue over the medium term. The outlook for the U.S., the top export destination, will be fairly flat this year with few aircraft scheduled for delivery in 2011, but will return to growth next year on the strength of Bombardier's recent NetJets order.

 

Canadian merchandise exports are forecast to rise 12 per cent in 2011 and 7 per cent in 2012. Nationally, economic growth is expected to rise 2.7 per cent in 2011 and 2.4 per cent in 2012. EDC is forecasting global growth of 4.1 per cent in 2011 and 4.3 per cent in 2012.

 

EDC's semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

 

EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 8,200 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.

 

(Courtesy of Canadian Business)

 

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