Ontario exports flat in 2006, declining in 2007
OTTAWA – November 21, 2006 – Ontario’s export growth is forecast to remain flat in 2006 before declining 3 per cent in 2007, according to a provincial export outlook by Export Development Canada (EDC).“Ontario exports experienced another tough year in 2006 as the automotive, consumer goods and forestry sectors struggled under the strong Canadian dollar, excess capacity and increased global competition,” said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. “In 2007, expect lower prices for industrial goods such as metals and petrochemicals to add to the ongoing weakness in forestry and autos.”
The woes affecting domestic auto producers will lead to declines in Canadian export earnings though 2007, compounded by closures and shift cuts throughout southwestern Ontario. Declining North American vehicle production will also drag down exports of auto parts in 2007. Overall, EDC expects Ontario’s exports of autos and parts will finish 2006 with a decline of 5 per cent, followed by another decline of 6 per cent in 2007 as US vehicle sales and production continue to slow. However, a number of recent investment announcements from GM, Chrysler, Ford and Toyota and Honda have bolstered the long-term outlook.
Exports of industrial goods are on track to rise by 10 per cent in 2006, bolstered by strong prices and demand. Aluminum, precious metals and some sub-sectors of the chemical industry are showing decent growth this year. The sector is forecast to decline by 2 per cent in 2007 as foreign demand moderates and commodity prices ease.
Ontario’s manufacturing sector is showing a mixed export performance. The strong Canadian dollar and higher input costs have reduced sales and profit margins for many of the province’s exporters. Nevertheless, some key manufacturing sectors such as aerospace, communications equipment, industrial machinery and rail equipment are posting gains. On the downside, clothing, textiles and furniture continued to see exports erode in 2006, and this pattern is expected to continue through the coming year
Nationally, Canadian economic growth is forecast to remain stable at 2.8 per cent in 2006 and 2.4 per cent in 2007. Canadian export volumes are forecast to grow by 3 per cent in 2006 before declining by 1 per cent in 2007. Internationally, EDC is forecasting 4.8 per cent global economic growth in 2006 and 4.0 per cent growth in 2007. EDC’s Global Export Forecast is available at http://www.edc.ca/docs/ereports/gef/EFindex_e.htm.
Export Development Canada (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 7,000 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 human resource management.
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Media contact:
Phil Taylor
EDC Public Affairs
(613) 598-2904
ptaylor@edc.ca
