(MONTREAL) – Wednesday, November 18, 2009 – Quebec's international exports will grow by 4 per cent in 2010, according to a provincial export forecast by Export Development Canada (EDC).
"Despite a better outlook for aluminum exports in 2010, total export growth will be limited to just 4 per cent next year, underscoring ongoing challenges in the forestry and M&E sectors, weaker aerospace deliveries, and Buy American provisions at the state government level," said Peter Hall, Chief Economist, EDC.
"Quebec's exports are heavily weighted towards the resources sectors, where ores, metals manufacturing and forestry products account for the bulk of foreign sales. With extremely depressed industrial and residential market activity, 2010 growth, small as it is, will be very hard won," added Mr. Hall.
The industrial goods industry is the largest export sector in Quebec, accounting for 36 per cent of the province's total. Overall, exports of the province's industrial goods are forecast to grow by 10 per cent next year.
"The 2010 outlook for ores and metals, an important sub sector of Quebec's industrial goods sector, will be defined by tentative improvements in year over year prices for most base metals and metal products, arriving in tandem with the first signs of a fragile recovery in key U.S. and European markets," said Mr. Hall.
Critical to the Quebec outlook is the price of aluminum, which is forecast to average around USD 1,600/tonne this year, down almost 40 per cent from last year's average. Demand for Quebec's aluminum exports comes from automotive, commercial construction and aerospace applications, and is expected to remain weak for the duration of the year before a modest rebound in 2010.
The forestry sector, accounting for 14 per cent of the province's total, remains severely challenged as record-low U.S. housing starts pummel lumber exports. Lumber export volumes are unlikely to regain much ground lost since 2005, as existing home inventories in the U.S. remain near all-time highs. A generally weak consumer segment and sharp declines in print advertising have taken the floor out of demand for paper and pulp products. Newsprint volumes will struggle this year and next, as the publishing world's trend toward electronic media continues, compounded by the adverse impact of the U.S. recession. Overall, forestry product exports from Quebec will fall 12 per cent this year and will remain flat in 2010.
The transportation sector accounts for 12 per cent of the province's total, and is forecast to decline by 9 per cent in 2010.
"In the defining aerospace sub sector, order deferrals and cancellation will dampen deliveries through 2010, and the flat growth rate expected this year will be wholly due to gains from a weaker loonie average. Given the lag between orders placed and actual deliveries, we expect sector exports to remain flat for the next few years," said Mr. Hall.
Canadian exports are forecast to contract 23 per cent in 2009 before rebounding 6 per cent in 2010. Nationally, economic growth is expected to fall by 2.3 per cent in 2009 with an upturn to 1.9 per cent in 2010. Internationally, EDC is forecasting a decline of 1.3 per cent in 2009 and 2.9 per cent growth in 2010. 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 more than 8,300 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been named one of Canada's Top 100 Employers for nine consecutive years.
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Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598 2904
BlackBerry: ptaylor@edc.ca
