B.C. Merchandise Export Outlook, Global Export Forecast Spring 2016
Traditional sectors offset impact of energy downturn
Export Development Canada predicts B.C.’s exports will grow by two per cent in 2016 and five per cent in 2017, compared to national export growth of 1.8 per cent in 2016 and 2.4 per cent in 2017.
“The top line numbers for B.C. might not look so great, but that’s because of the energy sector, which is masking the growth in other sectors,” said Peter Hall, EDC vice-president and chief economist, in a release. “Export diversity in B.C. is the reason for overall growth in 2016 and the positive outlook for 2017."
The province’s strongest growth will be in exports of forestry, agrifood and metals/ores. Forestry, which comprises more than one-third of B.C.’s exports and more than half of Canadian softwood lumber production, is expected to grow by four per cent in 2016, thanks to strong growth in U.S. housing starts. In 2017, exports will increase by seven per cent due to higher prices resulting from reduced supply: by then the mountain pine beetle infestation will have killed off nearly 56 per cent of harvestable timber, according to B.C.’s ministry of forests, with timber supply remaining below historical norms until 2075.
B.C.’s agrifood exports are expected to grow by seven per cent this year as strong harvests in the Interior and the low loonie boost sales to the U.S., with three per cent growth forecast for 2017. The weak loonie and increased production will also help B.C. metal and ore exports, expected to increase four per cent in 2016 and five per cent the following year. Gold sales are expected to rise due to economic volatility plus greater production from the Brucejack and Hope Bay projects. Copper production should grow in 2017 as the Red Chris and Gibraltar mines expand production following lower costs in 2016, and aluminum exports will expand as the Kitimat project gets closer to full production in 2017.
With the energy sector making up less than one-fifth of B.C.’s exports, the province will perform better than provinces with less diverse economies. Although B.C. energy exports will drop 10 per cent in 2016, they will rise by six per cent the following year thanks to higher prices.
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