November 9, 2004 VANCOUVER -- B.C. export sales are expected to level off in 2005, after exceeding the national average this year with 13 per cent growth in exports, according to a provincial export outlook by Export Development Canada (EDC). "Strong U.S. and foreign demand for exports from B.C.'s leading resource- based sectors resulted in positive gains this year," says EDC senior vice- president and chief economist Stephen Poloz. "But as prices begin to ease back, this growth should moderate going into 2005." Forestry product sales, which account for nearly half of all provincial exports, are forecast to contract by 1 per cent in 2005 after rebounding by 21 per cent this year. Strong pricing and rising volumes brought on by the U.S. economic recovery were behind this year's solid performance. Despite recent progress on the Canada-U.S. softwood lumber dispute, legal appeals will likely stretch well into 2005 placing pressure on the province's lumber shipments over the next 12 to 18 months. A moderation in U.S. housing activity and rising mortgage rates will also have a dampening effect on lumber and wood sales next year. Projected increases for lumber exports to Japan and other Asian markets will help mitigate some of the impact of decreased sales to the U.S. in 2005. A strengthening in global demand for pulp and paper exports, particularly from China, will also provide support for both price and shipment levels. The diversified industrial goods sector is projected to build on the 21 per cent rise in sales this year with a more modest increase of 2 per cent growth in 2005. Strong gains particularly in metal and mineral ore exports are projected to spur an increase in exploration and mining. Coal exports are expected to post impressive results thanks to a surge in prices of up to 40 per cent as China boosts its steel production, the chief use of coal. Energy exports are expected to decline by 3 per cent in 2005, following a slight increase in exports of 1 per cent this year. No significant growth is projected in the natural gas sector, but this is mainly a result of the high base established in 2003 when export receipts jumped by 56 per cent. In 2004, forestry exports will account for close to half, or $15.4 billion, of the province's overall exports. This is followed by industrial goods exports at $5 billion, energy at $4.9 billion, agri-food exports at $2.4 billion and machinery and equipment exports at $2.2 billion. Overall, B.C. export sales will reach $32.3 billion in 2004, up 13 per cent over last year, and are projected to remain flat in 2005. Nationally, the economy is expected to grow by 3.2 per cent in 2005, roughly on par with 2004, and export sales should increase by 1 per cent in 2005, after rising by 9 per cent this year. A copy of EDC's Global Export Forecast is available on EDC's web site: http://www.edc.ca/docs/ereports/gef/EFindex_e.htm EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates on commercial principles. - 30 - Media Contact: Glen Nichols Public Affairs Tel.: (613) 598-2876 E-mail: glnichols@edc.ca
