(OTTAWA) November 22, 2007 Quebec export growth is forecast to grow by estimated 2.7 per cent this year before receding by 1.4 per cent in 2008 as a result of a weakening global economy, according to a provincial export outlook by Export Development Canada (EDC).
"Forestry and consumer products will be the main drags on overall provincial export sales in 2007, with most other sectors registering modest growth," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "However, the strong performance of the aerospace sector is expected to continue through 2008, which will help buoy the province's overall export picture."
The industrial goods sector accounts for 36.2 per cent of Quebec's total export picture. On the heels of a 20.3 per cent surge in 2006, exports of industrial goods will rise by 9 per cent in 2007 owing to continued gains in metal and chemical prices. This increase, however, will be entirely price-related given that shipped volumes are predicted to contract. Looking forward to 2008, slower global industrial production will weaken the pricing environment considerably, causing the value of exports to fall by 9.5 per cent.
The forestry industry represents 16.5 per cent of the province's total exports and is forecast to decline by 9.4 per cent in 2007 amid continued pressed lumber and newsprint prices and falling sales of these commodities. The decline in US residential construction and a government-mandated 20 per cent reduction in allowable cuts (Bill 71) will dampen exports of Quebec timber. Furthermore, global oversupply and weak demand from US dailies and advertisers will drag down provincial newsprint sales. Looking to 2008, conditions will improve with a slight increase of 3.5 per cent, largely related to current plant closures that will rebalance supply conditions and a weaker Canadian dollar.
A healthy aerospace sector will drive an increase in 2007 of 8 per cent in the greater transportation sector, which accounts for 12.3 per cent of Quebec exports. A revival in prospects for Bombardier's regional jets, as well as continued strong demand for corporate airplanes, helicopters, engines, aircraft parts and avionic products will offset declines in the railway equipment segment. In 2008, the trend is expected to continue, with the aerospace sub sector driving overall transportation exports up by a further 4.8 per cent.
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
