(VANCOUVER) – October 31, 2007 – The value of British Columbia's provincial exports are expected to increase by 1.7 per cent in 2008 after declines of 2.4 per cent in 2007 and 2.0 per cent in 2006.
"The housing-led economic slowdown in the United States is a major challenge for B.C.'s forestry and wood product manufacturers," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "The province's forestry sector is going to continue to suffer from the U.S. housing recession through 2008. On the plus side, exports to China remain solid, led by exports of pulp, metal ores and machinery and electrical equipment."
Shipments of lumber and wood products are on track to decline by 15 per cent in 2007, but firmer prices in 2008 will help offset the effects of lower volume shipments resulting in a partial recovery of 6 per cent. The province's newsprint manufacturers are also struggling with weak prices and excess global capacity, which will continue to weigh on exports in 2008. In contrast, pulp shipments will fare better due to a better pricing environment and steady demand from Asia.
With natural gas supply and demand conditions fairly tight, natural gas prices are expected to average higher through the remainder of 2007 and rise further in 2008. These strong fundamentals will help support the value of gas exports. Higher export prices and stronger shipments are also forecast to boost coal exports by nearly 22 per cent in 2008. Energy exports overall are forecast to increase by 12.4 per cent in 2008.
While strong global demand for industrial metals, led by China, will ensure healthy activity in mining and industrial metal exports, the economic slowdown that is unfolding in the United States will act to moderate B.C.'s exports in agri-food, machinery and equipment and consumer goods throughout 2008.
Nationally, Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007, and 2.6 per cent in 2008. Key price gains in commodities have put Canadian exports on track to increase by 3.7 per cent in 2007, but the impact of weaker U.S. and global demand will have the export growth rate more than halved to 1.5 per cent in 2008. Internationally, EDC is forecasting a 4.9 per cent growth rate in 2007, and 4.5 per cent in 2008. EDC's Global Export Forecast is available at http://www.edc.ca.
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 6,400 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 has been recognize as one of Canada's Top 100 Employers for seven consecutive years.
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Media contact:
Phil Taylor Public Affairs Export Development Canada (613) 598-2904 ptaylor@edc.ca
