Global export forecast – spring 2018 electricity experiments for high school

####

Within manufacturing, aerospace is expected to see the most impressive gains. Exports are forecast to reach nearly CAD 19 billion in 2018, a 16% improvement compared to last year. In the Industrial Machinery and Equipment segment, exports will rise an impressive 9% this year, propelled by robust expansion in U.S. fixed investment and investor-friendly corporate tax changes. In contrast, automotive exports are expected to see no growth in 2018. Whereas positive demand dynamics are expected to support foreign sales of auto parts and heavier transportation equipment, exports of passenger cars and light vehicles will fall slightly due to longer-lasting structural factors and temporary plant closures weighing on Canadian production.

Canada’s outsized energy sector, which saw 34% export growth in 2017, will advance a modest 3% this year. Much more impressive growth is anticipated for other commodities with Forestry Products and Ores and Metals surging 16% and 13% respectively in 2018. Lumber and pulp and paper is set to reach nearly CAD 40 billion supported by a combination of solid U.S. housing starts, demand and supply constraints in British Columbia. Optimism for ores and metals comes from increased gold production and climbing copper, aluminum and nickel prices, the result of an environment where demand outstrips supply.

Forecast headwinds in 2018 and 2019 include global trade protectionism and gradual appreciation of the loonie compared to the U.S. dollar. The main upside risk is faster-than-anticipated trade expansion triggered by the unleashing of pent-up demand in major export markets and globally synchronized economic growth.

Newfoundland and Labrador will be the lone province to experience double-digit growth in nominal exports in 2018. While commodity price growth will play a role, the biggest contributor to the growth comes from a full year of increasing production from the Hebron offshore oil platform and the ramping up of Vale’s Long Harbour nickel processing plant. The multi-year nature of these startups will continue to boost the province’s exports into 2019. While Quebec’s goods exports are highly diversified, the significant increase in production of CSeries aircraft by Bombardier and the expansion of the Éléonore gold mine will help propel export growth of 8% in 2018. Alberta will see exports expand in 2018 now that the Fort Hills oil sands project and the Sturgeon Refinery have started production. Additional export capacity growth from the energy sector and the startup of a $360-million Cavendish Farms potato processing plant in Lethbridge will support growth in 2019. While on opposite sides of the country, expanded mining production will help boost exports for both Nova Scotia and British Columbia. In BC, higher production from the Highland Valley and Mount Milligan copper mines along with forestry prices that are offsetting the impacts of U.S. countervailing duties on softwood lumber support growth. In Nova Scotia, growth will be boosted by the opening of the Touquoy gold mine. In 2018, Prince Edward Island will see some growth, although the trade deal with the EU should support diversification for its agricultural and aquaculture products. Similarly, New Brunswick will see modest growth as stronger commodity prices help offset impacts from U.S. softwood lumber and groundwood pulp duties. For Ontario, a steadying of automotive demand in the U.S., coupled with uncertainty around the future of NAFTA and the U.S.’s sentiment towards trade, will weigh on the outlook. Saskatchewan and Manitoba’s will see limited growth as weak commodity prices and transportation bottlenecks and the closure of mines and a smelter and refinery hit the respective provinces goods exports.