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June 3, 2010

Ontario and Quebec exports will bounce back this year

Ontario's export sales are set to grow by 15 per cent in 2010 and a further 7 per cent in 2011, according to Export Development Canada's (EDC) Provincial Export Forecast released this week.

EDC characterizes 2010 as a bounce-back year for Ontario, as the province will post strong growth rates after last year's manufacturing shutdowns and closures. While the return to growth is a relief, EDC pointed out that the province's manufacturing activity will remain suppressed through 2011 compared with past performance.

The motor vehicle sector accounts for 29 per cent of the province's exports. Overall, EDC expects Ontario's exports of motor vehicles and parts should jump by 28 per cent this year and 8 per cent in 2011.

Ontario's industrial goods sector accounts for 32 per cent of the province's exports. EDC forecasts that exports of industrial goods will rebound by 15 per cent this year, on both higher shipments and stronger prices, and then a further 4 per cent next year, primarily on volume growth.

Quebec's exports will increase by 9 per cent this year, followed by more modest growth of 5 per cent next year.

The industrial goods sector accounts for 34 per cent of the province's exports, and is forecast to grow by 16 and 3 per cent in 2010 and 2011, respectively. The export outlook for Quebec's aluminum sector will improve in both volume and pricing terms.

In the aerospace sector, EDC expects exports of aircraft and parts to fall by 9 per cent this year and a further 2 per cent in 2011. Order deferrals and cancellations will dampen deliveries in 2010 and 2011, as the lagged nature of this export sector drags out the recessionary impact. Emerging markets are once again seen as an area of growth potential, with shipments to non-traditional trading partners expected to post healthy gains over the forecast horizon despite a contraction of overall sector exports.

The forestry sector accounts for 13 per cent of Quebec's exports, and EDC predicts that forestry product exports will increase 18 per cent this year and a further 5 per cent in 2011, with a significant price effect in both years.