Forestry among three key exporting sectors in British Columbia, making up 30%, EDC reports; after a further 9% gain this year, province's forestry sector will see 24% growth in 2013, as Chinese pulp imports will again resume strong trend, says economist
VANCOUVER, British Columbia
May 24, 2012
– British Columbia’s international exports will kick into gear in 2013, rising 13 per cent after relatively slow 4 per cent growth this year, according to the Global Export Forecast released today by Export Development Canada (EDC).
“Weak coal and natural gas prices will hold B.C.’s international energy sales flat this year, enough to soften the province’s entire export outlook,” said Peter Hall, Chief Economist of EDC. “The weakness is temporary, however, because B.C.’s export fundamentals are very sound, well diversified, and will remain solid over the long-term.”
The three key exporting sectors in B.C. are energy, accounting for 31 per cent of the province’s total exports; forestry, accounting for 30 per cent, and industrial goods, accounting for 20 per cent.
Energy exports are forecast to decline by 1 per cent in 2012 before rebounding with an 8 per cent gain in 2013. “Energy sector weakness comes in spite of rising volume shipments. Tumbling prices for natural gas and coal are trumping volume gains, but growth will return in 2013,” said Hall.
“Longer term, there is mounting interest in the province’s energy resources, due in large part to growing Asian demand for steel and electricity. International energy companies are lining up to invest in B.C.’s energy sector. Uncertainty over the future of Japan’s nuclear electricity system is stoking international interest.”
After a further 9 per cent gain this year, B.C.’s forestry sector will see explosive 24 per cent growth in 2013.
“China isn’t the story this time. Weakness there is being offset by resurgent U.S. housing starts and reconstruction efforts in Japan,” said Hall. “Chinese pulp imports will again resume a strong trend, but not before its slowing economy weighs on near-term demand.“
The industrial goods sector is forecast to grow by 7 and 10 per cent in 2012 and 2013, respectively.
“While the fundamentals for gold and copper will soften over the forecast horizon, industrial goods exports will benefit from greater mining production capacity,” Hall said. “New supply is coming on stream in 2012, boosting ore and metal exports despite weaker prices. With more than 350 mineral exploration operations and 20 major mine projects active throughout the province, the long-term outlook for BC’s mining sector is very promising.”
Hall was in Victoria and Vancouver today to share his forecast with the province’s exporters, the 11th stop of an 18-city cross-Canada tour. The tour is designed to offer market- and sector-specific insights to help Canadian exporting companies grow their international business.
EDC’s semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared. Read EDC’s Global Export Forecast.
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 7,700 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.