Ontario export growth to outperform national average in 2010, says EDC

OTTAWA, Nov. 17 /CNW/ - Ontario's international exports are forecast to grow by 14 per cent in 2010 and 7 per cent in 2011, according to a provincial forecast by Export Development Canada (EDC).

EDC's Chief Economist, Peter Hall, was in London today to speak about the global economy and the ongoing risks during the slow recovery.

"Ontario is one of only two provinces where exports will outperform the national average this year and next," said Mr. Hall. "The province can tip its hat to the huge rebound in the auto sector and robust gold production."

National export growth is forecast to ring in at 12 per cent in 2010 and decelerate to 6 per cent in 2011.

"There were many who considered Ontario exports a write-off only a few months, but the auto sector has experienced a remarkable about-face, and exports of industrial goods are also in the double-digit growth zone."

The auto sector, at 29 per cent of Ontario's total exports, is forecast to grow by a stunning 43 per cent in 2010 and a further 10 per cent in 2010

"Soaring demand for several Canadian-made models has further boosted our rosy spring forecast," Mr. Hall said. "Exports to the US have held up in spite of weak overall sales stateside. Ontario auto production has strengthened enough to spur significant new investments in the sector."

"The auto parts sector is still struggling with recession-induced credit challenges and a higher-cost operating environment, but will enjoy strong demand from U.S. OEM's, which are also experiencing robust growth rates. Price pressures remain, but overall shipments of motor vehicles and parts look good through 2011."

In the wake of the recession, the industrial goods industry sector has claimed top spot among Ontario exports at 32 per cent of the total. The EDC forecast calls for export growth of 15 per cent in 2010 and 4 per cent in 2011.

"One of the few export sectors to move against the tide in 2009 was precious metals, as prices soared on heightened economic and financial system uncertainty," Mr. Hall said. "High prices have spurred exploration and development in the mining industry, boosting near-term production."

"Steel capacity has been coming back online cautiously this year. Rebounding demand in North America coupled with strong sales to Brazil will lead to double-digit increases in shipments this year. Next year's growth will be constrained by a weak price environment."

The machinery and equipment industry is the third largest export sector in Ontario, accounting for 17 per cent of the province's total. After falling 20 per cent in 2009, the sector will be hit by a further 10 per cent reduction this year before seeing a modest rebound of 7 per cent growth in 2011.

"This year, very tepid U.S. demand for will overshadow very strong sales of mining equipment to Australia, where activity in the mining industry is being driven by China's thirst for raw materials."

"Machinery and equipment exports will remain at low levels until the global recovery gets into full swing. At that point, increased activity will begin to soak up excess industrial capacity, boosting investment. But that point is still more than a year away."

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, and has been recognized as one of Canada's Top 100 Employers for nine consecutive years.

For further information:

Media contacts:

Phil Taylor   
Export Development Canada
Blackberry:  [email protected] (preferred)
Tel: [phone]