VANCOUVER, May 13, 2006 -- Despite strong performances expected in energy and industrial goods, the slump in the forestry sector will drag B.C.'s overall export growth down to just 1 per cent in 2006 and 0 per cent in 2007, according to a provincial export outlook by Export Development Canada (EDC). In other sectors, the province's exporters are expected to produce solid gains through the next 12 to 18 months.
"The forestry sector will continue to decline through 2007, but the province's overall export growth will be buoyed by the energy sector," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "Considering the challenge of a strong Canadian dollar, the industrial goods, agri-food and manufacturing and equipment sectors are all performing very well and experiencing solid growth." British Columbia's exports are driven primarily by the forestry sector, which accounts for 40.7 per cent of the province's goods and services shipped abroad while the energy sector accounts for 22.4 per cent.
B.C.'s forestry exports were down by 6.5 cent in 2005. Housing starts in the U.S. and building permit applications ended 2005 on a downward trend, foreshadowing weaker demand for British Columbia's lumber exporters over the forecast horizon. Starts are expected to dip below the 2 million-mark this year, and fall to 1.8 million in 2007. Weaker economic growth and a tightening of the credit environment south of the border will add to the constraints of the forestry slump. Export volumes are forecast to see declines of 5 per cent in 2006 and 4 per cent in 2007.
The value of B.C.'s energy exports soared 67.5 per cent in 2005, due to a combination of strong pricing and increased demand. Electricity led the way in 2005, up 127 per cent, followed by coal export growth of 90 per cent and a 52 per cent increase in natural gas exports. A 20 per cent increase in drilling activity in anticipated in 2005. Despite strong growth in 2005, a weakening of oil prices over the next 12 to 18 months will result in more moderate growth forecasts of 5 per cent in 2006 and 6 per cent in 2007.
Nationally, Canadian economic growth is forecast to remain stable at 3.0 per cent in 2006 and 2.7 per cent 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 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/docs/ereports/gef/EFindex_e.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.
30
Media contact: Phil TaylorEDC Public Affairs(613) 598-2904 ptaylor@edc.ca
