TORONTO—There is no time like the present for Canadian firms to export their goods to the United States, according to a new report from from Export Development Canada (EDC).
The agency’s latest global export forecast predicts industrial capacity constraints within the U.S. will be a key driver of global economic growth over the next two years.
A higher U.S. dollar is also making foreign investments and imports more attractive.
The EDC says those factors are creating a “huge opportunity for Canadian companies to meet the U.S. economy’s need for goods, services, and production capacity.”
The agency says U.S. consumers are confident again, employment is up, wages are rising, debt ratios are sinking and Americans are spending.
“As a result we’re seeing facilities in the U.S. being pushed to capacity as they scramble to keep up with increasing demand,” said EDC chief economist Peter Hall.
“If ever there was a time for businesses, whether small, medium or large, to start exporting to the U.S., it’s now.”
EDC’s forecast for the American economy is 3.6 per cent growth in 2015 and 3.3 per cent in 2016.
The agency forecasts Canada’s export growth to be one per cent this year and seven per cent in 2016. The outlook for Canadian GDP is 2.4 per cent for 2015 and 2016.
It says Canada’s exports have diversified considerably to emerging markets over the last few years, and that trend is expected to continue into 2016. The share of Canada’s exports destined for those markets was five per cent in 2000, but now tops 12 per cent.
Hall notes that while the United States is a key growth driver, spill-over growth will reach Europe, the rest of the developed world and emerging markets.
Hall does offer a word of caution in the EDC report, saying the global economy is “nearing the end of its high-wire act.”
“There are still a lot of pretty big post-crisis risks lurking out there and it’s important that businesses insure their activities against these risks.”