(LONDON) November 20, 2007 Ontario's export growth is expected to decline again in 2008 following a year of growth, according to a provincial export outlook by Export Development Canada (EDC). Ontario's exports are expected to increase 2.4 per cent in 2007, driven, in large part, by decent gains in the metals and chemicals sectors, before declining by 0.7 per cent in 2008 as US and global demand slow and as commodity prices weaken.
"While the manufacturing sector continues to struggle, the metals industry helped to offset the weakness because it's riding a wave of strong global demand and high commodity prices," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "The industrial goods sector, accounting for 27 per cent of Ontario's' export picture, was the main engine of Ontario's growth in 2007, in addition to strong transportation and pharmaceutical sector performance."
Auto exports (passenger cars, auto parts and trucks) represent Ontario's largest export sector, accounting for 39.7 per cent of total exports. As the Detroit Three continue to lose market share and US auto sales drop to a 9-year low in 2007, passenger vehicle exports fell 6.2 per cent in 2007. The startup of Toyota's new facility in Woodstock will provide a welcome boost in 2008, but even so, exports will only just maintain the 2008 pace. In spite of intense foreign competition, auto parts exports are forecast to rise 1.9 per cent in 2008, following a 1.4 per cent tumble in 2007. Although heavy truck exports are expected to drop by 33 per cent in 2007, the corresponding pent-up demand will see shipments partially recover in 2008 with growth of 8.2 per cent.
With foreign shipments on track to grow 18 per cent in 2007, the industrial sector will be the largest contributor to the province's export growth this year. In particular, export of metals and metals manufacturing are expected to expand 24 per cent in 2007, with most of the growth coming from the mining sector as strong global demand and high commodity prices continue. However, EDC Economics expects commodity prices to retreat through 2008, leading industrial goods exports to a decline of 7.2 per cent in 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/gef.
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 TaylorEDC Public Affairs(613) 598-2904ptaylor@edc.ca
