HALIFAX—Nova Scotia’s international exports are set for double digit growth in each of the next two years, well ahead of the national average, according to Export Development Canada’s (EDC) Global Export Forecast.
EDC’s Chief Economist, Peter Hall predicted Nova Scotia’s exports will grow by 12 per cent in 2013 and a further 11 per cent in 2014.
“The two main drivers of the Nova Scotia export story this year will be energy and forestry, both surging ahead in a big way,” Mr. Hall said. “The sharp acceleration will be fueled by the first gas from Deep Panuke, and a surge of paper shipments. The rebound in U.S housing will also boost exports of Nova Scotia wood products.”
EDC’s forecast for the U.S. economy is based on the significant increase in private sector momentum in spite of considerable fiscal drag. The housing market has finally returned to balance as the enormous excesses of the last cycle have been ‘soaked up.’
This activity is causing businesses to use up the last of their spare production capacity, pushing them to kick off a new wave of investment spending.
“What we see is a U.S. private sector that is reviving on a broad front in spite of significant drag from public sector cutbacks.”
The agrifood sector accounts for approximately 31 per cent of the Nova Scotia’s total exports, the province’s largest export industry in 2012. EDC’s forecast for this sector calls for steady export growth of three per cent this year and next.
“A slight drop in the Canadian dollar is helping to bolster shellfish pricing,” said Hall. “While we expect U.S. demand for lobster to remain steady, demand from China, which now accounts for nearly 25 per cent of non-US sales, should continue surging. Longer term, the fact that Maine’s lobster fishery recently became certified as sustainable by the Marine Stewardship Council could soon pose a competitive threat for sales to higher-end restaurants and more environmentally-conscious consumers.”
The transportation sector is another important contributor to Nova Scotia’s export picture, contributing approximately 28 per cent of the provincial total. EDC’s forecast predicts the sector will grow by six per cent this year and next.
“Nova Scotia’s auto parts sector, led by Michelin, will see more modest growth this year and next,” Mr. Hall said. “Tire exports, 95 per cent of which are shipped to the U.S., hit a record CAD$1.03 billion last year, so the good news is that production is growing on top of very high output figures.”
Nova Scotia’s exports to emerging markets accounted for 12 per cent of the province’s total in 2012, up from 10 per cent in 2011. China accounts for roughly one-third of related shipments, with another third coming from India, Russia, Mexico and Turkey.
Nationally, Canadian merchandise exports are forecast to rise nine per cent in 2013 and five per cent in 2013, while GDP is expected to rise 2.2 per cent this year and 1.9 next year.
EDC forecasts global growth of 3.6 per cent in 2013 and 4.2 per cent in 2014.
EDC’s semi-annual Global Export Forecast addresses the latest global export conditions including market- and sector-specific insights to help Canadian exporting companies grow their international business and minimize risk.