VANCOUVER, BC The province’s truckers can look forward to the ripple effects created by a surge in B.C. exports that will outpace that of the Canadian economy.
B.C. export sales are expected to increase 10 per cent this year, beating the national average and improving upon the 1.6 per cent decline last year, according to a provincial export outlook from Export Development Canada (EDC).
"The province has weathered the storm of 2003 and is now on much stronger footing. The B.C. economy is projected to perform better than its counterparts in the rest of Canada," says EDC senior vice-president and chief-economist, Stephen Poloz. "The bullish outlook is primarily a result of rising forestry exports, but also because of heightened demand from China for B.C.’s industrial goods."
After several years of sub-trend global growth, the forestry sector, which accounts for about half of all provincial exports, will see better times with export sales rebounding 15 per cent in 2004 from a 10 per cent decline last year. Lumber, paper and pulp are all poised to benefit from firmer prices brought about by strengthening demand in key markets.
Cautious supply management will be an important factor in dampening the effects of the ongoing Canada-US softwood lumber dispute on lumber prices, while a very competitive Canadian dollar and robust demand from China and Japan will keep volumes of pulp exports buoyant. Finally, newsprint exports will begin to respond to the synchronized global recovery, with sharp increases in demand coming from non-traditional markets such as Latin America.
Energy sector exports helped B.C. weather the challenges of 2003, particularly the devastating forest fires, as natural gas prices jumped 62 per cent last year, bringing in much needed export receipts. Export gains made last year will continue into 2004 as declining North American reserves and this year’s frigid winter will keep prices above their historical average. This pricing pressure in the natural gas market will spill-over into the hydro market, and along with strong global demand, should help produce impressive export gains for the sub-sector in 2004.
The final bright spot in the province’s export picture is the well diversified industrial goods sector. Stronger global demand for industrial goods, particularly from China, will cause exports to rise by 16 per cent in 2004, from 4.4 per cent last year.
B.C. export sales were $28.6 billion in 2003, down 1.6 per cent from the previous year. Of this amount, forestry exports accounted for nearly half or $ 12.7 billion. This was followed by energy exports at $4.9 billion, industrial goods at $4.1 billion, agri-food exports at $2.4 billion and machinery and equipment exports at $2.1 billion. The U.S. was the largest export market, buying $18.9 billion of the province’s exports. Japan absorbed $3.6 billion and a further $3.0 billion went to other Asian markets. Europe accounted for $1.9 billion of sales.
Nationally, the economy is expected to grow by three per cent in 2004 and by 3.3 per cent in 2005. Export sales should increase by six per cent in 2004 and by two per cent in 2005.
Mr. Poloz outlined his forecast at a Vancouver Board of Trade luncheon.
A copy of EDC’s semi-annual global export forecast is available on EDC’s web site: http://www.edc.ca/docs/ereports/gef/EFindex_e.htm
EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates as a commercial financial institution.
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