OTTAWA, April 26, 2006 -- Ontario's export growth is forecast to
continue the flat trend of 2005 with a stagnant 1 per cent growth in 2006
(0.8 per cent in 2005), according to a provincial export outlook by Export
Development Canada (EDC).
"The auto sector accounts for 42 per cent of Ontario's exports, and the
challenges of the industry are dragging down the overall provincial export
performance in a major way", said Stephen Poloz, Senior Vice-President of
Corporate Affairs and Chief Economist. "Compounding the chill effect of the
auto sector, falling shipments of forestry and consumer goods are also
contributing to the bleak growth outlook."
Capacity cuts at the GM and Ford plants, and the resulting closures of
many direct and indirect suppliers, will depress Ontario's motor vehicle
exports through 2007. Most of the export reduction will be felt in 2007, when
the Oshawa and St.Thomas plants are scheduled to be shut down. Passenger
vehicle demand will soften as interest rates climb and fuel prices remain
high. EDC forecasts a decrease of 3 per cent in 2006 and 5 per cent in 2007
for auto sector exports.
Strong global demand for manufacturing inputs and climbing commodity
prices will continue to support Ontario's exports of industrial goods, which
are expected to climb 6 per cent in 2006 after an impressive 5.7 per cent
increase in 2005. Though industrial goods account for only 24 per cent of
Ontario's exports, they will be responsible for the bulk of the increase in
provincial exports during 2006, with a contribution exceeding CAD 2.7 billion.
However, falling prices and softening global demand will reduce growth of
industrial good exports to 1 per cent in 2007.
Ontario, being the nation's leader in the machinery and equipment sector,
will continue to benefit from the corporate investment trend and will see
exports increase 5 per cent in 2006 and 4 per cent in 2007. Ontario's exports
of agri-food products are forecasted to rebound heavily in 2006 with a robust
9 per cent increase (-1.3% in 2005) thanks to a strong pricing environment and
higher crop yields.
Nationally, Canadian economic growth is forecast to remain stable at
3.0 per cent in 2006 and 2.7 in 2007. Canadian export volumes are forecast to
grow by 3 per cent in 2006, up slightly from 2 per cent in 2005.
Internationally, EDC is forecasting a 4.3 per cent global economic growth in
2006 and 4.1 per cent growth in 2007, down from 4.5 in 2005. The continued
healthy performance remains ahead of the historical long term average. EDC's
Global Export Forecast is available at
http://www.edc.ca/english/docs/ereports/gef/country_information_efindex.htm.
Export Development Canada (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 7,000 Canadian companies and their global customers
in up to 200 markets worldwide each year. EDC is financially self-sustaining
and is a recognized leader in financial reporting, economic analysis and human
resource management.
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Media contact:
Phil Taylor
EDC Public Affairs
Tel.: (613) 598-2904
E-mail: ptaylor@edc.ca
