VANCOUVER - November 14, 2006 - The value of British Columbia's provincial exports continue to struggle under the weight of the forestry sector's decline, holding B.C.'s overall export growth to 2 per cent in 2006 and pushing them down by 3 per cent in 2007, according to a provincial export outlook by Export Development Canada (EDC).
"We continue to see a significant split in the province's performance, with the forestry sector contracting while almost all other sectors continue to grow," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "The importance of the forestry sector, however, will drag overall exports into negative territory in 2007." 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 22.9 per cent.
B.C.'s forestry exports are forecast to decline by a further 2 per cent in 2006 and 4 per cent in 2007. The decline in exports largely reflects the lower prices for softwood lumber, the declining housing market in the US and the persistently higher Canadian dollar. Strong price increases for newsprint and most paper grades in 2005 offset the impact of the higher dollar and the closure of Number 3 at Catalyst's paper mill in Port Alberni. However, global demand will start to wane in 2007, just as new pulp and paper capacity in Asia and South America comes online, further dampening the export outlook.
The value of B.C.'s energy exports are expected to grow by 2 per cent in 2006 and decline by 2 per cent in 2007. The province's energy sector posted significant growth of 71.4 per cent in 2005, largely attributable to greater electricity demand from the U.S. and higher prices for coal that led to a jump in exports to Asia, Europe and the U.S. In 2006, a decline in electricity exports will partially offset the continued strong growth in exports of coal and natural gas. In 2007, coal and natural gas exports are expected to follow price trends, although the opening of Cine Mining's Lossan and Lodgepole mines and additional natural gas capacity could boost overall exports.
Nationally, Canadian economic growth is forecast to remain stable at 2.8 per cent in 2006 and 2.4 per cent in 2007. Canadian exports are forecast to grow by 3 per cent in 2006 before declining by 1 per cent in 2007. Internationally, EDC is forecasting 4.8 per cent global economic growth in 2006 and 4.0 per cent growth in 2007. EDC's Global Export Forecast is available at http://www.edc.ca/docs/ereports/gef/EFindex_e.htm.
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 TaylorPublic AffairsExport Development Canada (613) 598-2904ptaylor@edc.ca
