Depressed commodity prices and political and economic challenges in the world's two largest economies have hurt Canada's exports so far this year.
Export Development Canada (EDC) recently downgraded its forecast for export growth in Canada to 5% this year from an initial estimate of 9%. Much of that was due to lower than expected commodity prices and weaker export growth in Ontario and Quebec.
But B.C. should see above-average growth in domestically produced goods over the next two years as the province's key resource sectors increase production to meet global demand.
EDC is forecasting B.C.'s exports to grow 8% in 2013, driven by the increase in prices and shipments of lumber to the U.S. stemming from the recovery of the American housing market.
According to BC Stats, for the first eight months of the year, wood product exports have risen 28%, mainly from increased shipments to the U.S., followed by increases to China and Japan.
B.C.'s natural gas exports, which have suffered from low prices, have recovered 33.4% year to date, with nearly $1.1 billion in natural gas shipped. That's up from $820 million in the same period last year.
Those gains in the energy sector, however, have been offset by a 21% decline in the exports of B.C. coal, which EDC expects to drop to 25% by the end of the year.
But 2014 should be a banner year for B.C. Exports are forecast to jump 12% with a recovery in all major resource exports next year. Forestry will continue to grow as U.S. housing starts are forecast to rise 28% in 2014 following a 25% jump in 2013.
Coal exports are expected to increase by 5% next year as Asian demand for metallurgical goal grows amid shrinking global supply because of the closure of high-cost mines.
Natural gas exports, which have recovered this year, will also increase another 9%, according to EDC, and B.C.'s metals exports should also rise as output from new mines coming online in 2013 and 2014 more than offset continued weakness in commodity prices. •
