A new forecast predicts that a weak loonie and strong U.S. demand will boost Nova Scotia’s exports by six per cent this year and by four per cent in 2017.
In its semi-annual outlook, Ottawa-based Crown corporation Export Development Canada (EDC) predicts that several of Nova Scotia’s key export-oriented sectors will do very well, notably motor vehicle tires and seafood.
EDC predicts the province’s agri-food exports will rise by nine per cent this year and five per cent next year thanks to a lower Canadian dollar and continued strong demand for live lobster.
EDC chief economist Peter Hall told the Chronicle Herald that China will be a driver of growth despite its struggling economy.
“Even with a deceleration in China, its population’s rising disposable incomes and appetite for seafood will drive continued growth in sales to the second most important destination country for Nova Scotia live lobster (after the U.S.).
“Another promising development on the horizon for the seafood industry is the expected ratification in the short term of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union,” Hall said.
The motor vehicles and parts sector, which makes up close to a quarter of Nova Scotia’s exports, will increase by 10 per cent this year, driven by solid prices and growing demand in the U.S. for heavy trucks and SUVs, the forecast said.
The province’s forestry exports are forecasted to decline this year by four per cent, due in large measure to the heavy tariffs imposed by the U.S. government on newsprint exports. However, the expected resolution of this trade issue as well as sustained double-digit housing start growth in the U.S will push forestry exports up by seven per cent next year.
Outside Nova Scotia, the forecast said Prince Edward Island will enjoy seven-per-cent export growth this year, thanks to the province’s aerospace industry.
Ontario is also expected to grow seven per cent, due to 10-per-cent growth in its automotive sector, which accounts for nearly 40 per cent of Ontario’s exports.
The EDC predicts exports will rise by five per cent in Quebec, four per cent in Manitoba and a modest two per cent in British Columbia.
At the other end of the scale, the EDC predicts exports from Newfoundland and Labrador will drop by 11 per cent and by 10 per cent in Alberta due to continuing low prices for natural gas and crude oil. The same factors are also expected to cause a six-per-cent drop in exports from New Brunswick and a three-per-cent drop in Saskatchewan despite strong performances by non-energy industries.
On a national basis, the federal agency predicts Canadian merchandise exports will grow at a tepid pace of just two per cent this year with negative growth in the energy, fertilizer, chemicals and plastics sectors. In 2017, however, the EDC predicts a gradual strengthening of natural gas and crude oil prices will steer Canadian exports toward a six-per-cent expansion.