Aerospace sector continues to power strong export growth for Quebec: EDC
Quebec’s highly diversified economy is on track for continued growth in exports this year and next, led by continuing strong international demand for aircraft and parts, according to a new global export forecast released by Export Development Canada (EDC).
The Global Export Forecast Fall 2015 says the export of aircraft and parts, which accounts for nearly 14 per cent of the total value of Quebec exports, will rise 33 per cent in 2015 and another 17 per cent in 2016. This, in turn, will help to generate a 10 per cent increase in overall exports this year and eight per cent growth in 2016.
“Quebec has a very vibrant aircraft and parts sector – and not just the big companies such as Bombardier, CAE and Pratt & Whitney, but also the many smaller firms that supply them,” said Peter Hall, Chief Economist at EDC. “Demand from around the world, including from emerging markets, has been very strong in 2015, and this will continue in 2016.”
Metals, ores and other industrial products make up the largest sector of Quebec exports, so the five per cent growth in this sector’s exports in 2015 and six per cent growth in 2016 are also helping to fuel Quebec’s solid export performance. Within the sector, however, iron ore exports remain depressed as a result of continued price weaknesses and the closure of Cliffs Natural Resources’ Bloom Lake mine, but gold exports will be boosted by the start of commercial shipments from the Éléonore gold mine earlier this year.
Like other provinces, Quebec is benefitting from strong demand from U.S. customers and a weaker Canadian dollar, as the United States takes almost three-quarters of Quebec’s exports. The province also has a tradition of exporting to Europe, but a decline in the value of European currencies against the U.S. dollar means Quebec’s exports enjoy less of a price advantage there.
“Quebec is one of Canada’s more diversified export economies, both in terms of what it sells and where it sells,” said Hall. “That said, most of the growth this year and next will come from the United States, where the economy is showing no signs of slowing down.”
Strong U.S. housing starts are creating demand for lumber, helping to drive six per cent growth in exports by Quebec’s forestry sector in 2015 and four per cent growth in 2016. The increase in lumber exports also helps to offset a decline in newsprint and pulp exports caused by non-tariff trade barriers in several countries and the closure of several Quebec mills.
EDC is Canada’s leading provider of small business financing and insurance for companies with sales or business outside of Canada. Some of its services include the Export Guarantee Program to help exporters access more financing, Foreign Exchange Facility Guarantee to help exporters manage foreign exchange risk, and Political Risk Insurance that can cover up to 90 per cent of losses from political risks in foreign markets.
EDC’s economics team includes some of Canada’s leading trade experts, who share their knowledge freely with Canadian companies looking to grow their international sales and help them manage the associated market risks. Its semi-annual Global Economic Forecast addresses the latest global export conditions, including providing perspectives on leading economic trends and export strategies to help Canadian companies of all sizes maximize their export growth. The forecast also analyzes a range of risks for which exporters should be prepared.
Visit the Global Export Forecast: Fall 2015 page for the full report.