With all of the talk of a looming global recession and economic slowdown being awfully high, there is some good news from EDC’s (Export Development Canada) recently released outlook for 2020. The report provides a glimmer of hope for some sectors that poised to increase growth over 2019.
EDC’s fall Global Export Forecast, and expectations for 2019 show solid export growth across all provinces. Throughout Canada, exports of goods are expected to grow another 4% in 2019, following a 6% boost this year.
Exporting companies in the Forestry products, Agri-Food, and Ore and Metals sectors are expected to see modest increases in their growth in 2020. It also sees a near-term resolution that should reignite growth.
On one hand, global growth is slowing, led by weak business investment and trade. But the other, on the consumer side, the picture is much better; job creation continues, unemployment is low, and consumer spending is holding up.
Forestry Products
2019 has been a disappointing year for this sector with a 12% decrease in growth. The result of dropping lumber prices and weak U.S. housing starts. Coupled with soft Chinese demand for pulp, overall, it has been a difficult time. The expectation, however, is that as supply has tightened up, prices for products will rise in 2020, leading to a welcome 6% growth. The forecast is that BC will see a modest 2% increase in growth next year vs. -5% this year.
Agri-Food
This is a $66 billion a year sector. It has a broad definition, encompassing a significant number of products. Everything from Meat, Eggs, and Seafood to Ethanol from corn and other sources can be lumped into this sector. The big news, of course, is that with the loosening of the import restrictions into China of Beef and Pork, 2020 is expected to see growth of even greater than the 4% that EDC published in their report. Compared to the slight growth of only 2% in 2019, 2020 will be a welcoming year to this sector. Saskatchewan, in particular, is expected to benefit from this growth. Thanks to trade agreements with Japan (CPTPP) and the European markets (CETA), PEI is expected to see benefits as well.
Ores and Metals
Behind Energy and Automobiles, this is Canada’s third-largest export sector contributing $79 billion to the outlook table. 2019 saw a modest 2% growth in this sector but that number is expected to increase to 3% in the coming 16 months. Prices of the metals that make up the majority of this sector have been hit hard this year but that is expected to change in 2020.
Ontario and Quebec are the largest exporters for this sector and will be the regions that are expected to see the growth. Economic growth should continue at a modest pace both in Canada and internationally in 2020.