Favourable exchange, U.S. recovery to fuel strong export growth
LONDON, Ont.—A new forecast by Export Development Canada predicts Ontario will see broad-based gains in exports this year and next thanks to a favourable exchange rate and rising demand caused by a strong recovery in the U.S. economy.
The Crown corporation says it expects to see Ontario exports grow by 11 per cent this year, led by double-digit growth in the automotive and manufacturing sectors.
The EDC predicts similar conditions will prevail in 2016, resulting in a further six per cent increase in exports.
Motor vehicles and parts make up more than a third of Ontario’s exports and the EDC says they will rise 13 per cent this year and a further four per cent in 2016.
It says this will be largely due to strong vehicle sales in the United States.
The industrial machinery and equipment sector is expected to see a 16 per cent rise in exports this year due to increased U.S. demand and a price advantage due to the lower Canadian dollar.
Metals, ores and other industrial products, which account for 21.5 per cent of Ontario exports, will see shipment values increase by seven per cent in 2015 and 2016, according to EDC.
“The weaker Canadian dollar and much lower oil prices have, not surprisingly, shifted the centre of growth in Canadian exports to the manufacturing heartland, and Ontario is benefitting greatly from this,” said EDC chief economist Peter Hall.
“Exports rebounded nicely in June and July after a slight weakening at the start of the year, putting Ontario on track for very healthy export growth in 2015 and again in 2016.”
The EDC is Canada’s trade finance agency and helps Canadian companies respond to international business opportunities.