B.C. export growth stable, tops other provinces in 2011, says EDC

VANCOUVER, Nov. 10 /CNW/ - British Columbia's (B.C.) international exports are forecast to grow by 13 per cent in 2010 and 10 per cent in 2011, according to a provincial forecast by Export Development Canada (EDC). B.C. is the only Canadian province that is expected to achieve double-digit gains in both 2010 and 2011.

"The forestry, energy and metal mining sectors all experienced a sharp rebound this year from the huge declines sustained in 2009," said Peter Hall, Chief Economist, EDC. "In 2011, export growth will remain vibrant in all three sectors, helped by strong prices and increased capacity."

EDC's forecast noted that in the first half of 2010, B.C.'s exports to China grew by 32 per cent, Southeast Asia by 36 per cent and South Asia by 69 per cent.

"Diversification is a big part of the province's 2010 success story," Mr. Hall said. "Despite weak U.S. demand going forward, B.C.'s export growth will benefit from continued strong demand in emerging Asian markets."

The forestry industry is the largest export sector in the province, accounting for more than 30 per cent of B.C.'s total exports. EDC predicts that the sector will grow by 17 per cent in 2010 and a further 8 per cent in 2011.

"U.S. housing markets remain in deep trouble, suppressing new home construction and renovation activity for most of 2011," said Mr. Hall. "One bright spot for the industry is exports to China, which are up 80 per cent in the first half of 2010 after rising 75 per cent in 2009."

"Chinese pulp imports rose dramatically in 2009 and will continue to be an important growth driver in 2010 and 2011. But growth shouldn't be taken for granted. Canadian producers will face increased competition from new capacity in Southeast Asia at the same time as buyers show less concern about inventory building." 

EDC's forecast has a softer outlook for pulp going forward as prices head down following the resolution of global supply issues. However, the forecast notes that the effects of weaker pricing will largely be offset by the recent reopening of the Mackenzie mill, which had been closed for two years.

The energy sector accounts for nearly 27 per cent of the province's export total, and is forecast to grow by 17 per cent in both 2010 and 2011.

"Through 2011, B.C.'s energy sector exports will continue to show strong growth thanks to increased production capacity for coal and natural gas and much higher prices for metallurgical coal," Mr. Hall said.

"B.C. is currently building a lot of growth potential in for natural gas and coal exports with new projects, and for the longer term, we anticipate strong export growth from these sub sectors."

Canadian exports are forecast to rise 12 per cent in 2010 and 6 per cent in 2011. Nationally, economic growth is expected to rise 3 per cent in 2010 and 2.2 per cent in 2011. Internationally, EDC is forecasting global growth of 4.3 per cent in 2010 and 3.9 per cent in 2011. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

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 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 8,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis.

  

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Phil Taylor   
Export Development Canada
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