OTTAWA, July 12, 2012 /CNW/ - Export Development Canada (EDC) today commented on the underlying strength of a developing U.S. economic recovery, set to lead the world into the next growth phase by the end of 2012.
"There has been real, sustainable growth happening in the U.S. private sector since the start of the year, somewhere in the 4 to 5 per cent range, but that story is masked by the headline numbers driven down by government cutbacks," said Peter Hall, Chief Economist of EDC.
"If everyone agrees on U.S. growth in the 2.5 per cent zone, why is housing up 30 per cent, autos up 25 per cent, real retail sales up 3.5 per cent, and manufacturing capacity utilization getting back to its previous peak? With these underlying fundamentals, we expect underlying growth in the U.S. closer to 5 per cent in 2013, ushering the world into the next growth cycle."
"Canada's modest growth numbers seem to fly in the face of the upbeat U.S. story, but, it's the story behind the headline numbers that matters. Canada's over-indebted consumers and oversold housing markets together with government cutbacks suggest weak near-term domestic demand." The Canadian economy is forecast to see 2 per cent growth this year and 2.2 per cent in 2013.
"In contrast, the U.S. revival and strong gains in emerging markets is expected to lift export growth to 7.2 per cent this year and 6.6 per cent in 2013. Not only do these numbers signal real export growth, we will have finally recouped all of the export growth lost as a result of the crisis and then some. "
EDC believes that Canada's global sales will be powered in 2013 by double-digit gains in the forestry, industrial machinery/equipment and fertilizer sectors. The auto sector is expected to remain strong, but softer commodity prices are forecast to dampen otherwise impressive oil and gas and base metal sales. Most other sectors are expected see decent growth in 2013.
Hall made the comments as an update to his spring forecast.
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 7,700 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.
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