The ongoing uncertainty surrounding the renegotiation of the North American Free Trade Agreement (NAFTA) is unlikely to impact Canadian exports this year, says the Ottawa-based Export Development Corporation (EDC) in a new report.
In its latest forecast, EDC says that the value of Canadian exports will grow by 6% this year despite ongoing NAFTA turbulence and trade protectionism south of the border in the U.S. In its twice-yearly outlook, EDC forecasts that Canada’s export growth in 2018 will be led by three sectors: ores and metals, aerospace and forestry. Ironically, all three of these sectors have proven to be contentious trade issues between Canada and the U.S.
Exports from the aerospace sector are forecast to reach $19 billion this year, up 16% from 2017. Though Bombardier Inc. isn’t planning a dramatic increase in production of aircraft this year, the growth will be driven by an expected shift toward higher value products, including doubling the manufacturing of the C Series aircraft, said EDC. The ores and metals sector, led by exports of nickel and aluminum, will grow by 13% to $88 billion.
Lumber and forestry exports are also expected to grow 16% to $39.4 billion in 2018, amid increased housing demand and rising prices. Supply in the forestry sector has been constrained by record wildfires in British Columbia. The uptick for forestry could be temporary, however, in light of significant new investment in lumber mills in the southern U.S.
According to the EDC report, exports from Canada’s energy sector will grow just 3% in 2018, while fertilizer shipments are expected to fall by 1%. Automotive exports are expected to be flat in 2018 after posting a 4% decline in 2017.
