U.S. recovery to spur growth in Quebec exports through 2014: EDC

The ongoing recovery south of the border will drive Quebec’s exports to grow by 14 per cent over the next two years, according to Export Development Canada (EDC).

According to EDC chief economist Peter Hall, the province’s exports are projected to surge by eight per cent in 2013 and a further six per cent in 2014 on the back of continued recovery in the U.S. “The U.S. buys two-thirds of all Quebec exports, and with (its) recovery gaining momentum through 2013, we’re looking at a solid export increase after a few years of low export growth,” Hall said in a statement. “Quebec’s export sales are heading north, with help from our southern neighbours.”

The projections were part of EDC’s Global Export Forecast.

Hall’s forecast for the U.S. economy is based on the opinion that there is significant private sector momentum in that nation despite the fiscal drag.

The housing market has finally returned to balance as the excesses of the last cycle have been soaked up over the past few years and now prices have firmed and housing starts are soaring.

“U.S. consumers are also spending, particularly on larger goods, and businesses, who are now running out of productive capacity, are beginning to spend the mountain of cash that has built up,” Hall said.

The industrial goods sector, which includes ores, minerals and metals exports, accounts for approximately 38 per cent of the province’s exports. EDC’s forecast for this sector calls for export growth of seven and two per cent in 2013 and 2014, respectively.

“Despite regulatory headwinds in the form of changes to the Quebec mining regime, the metals and mining industry remains a key contributor to Quebec’s overall export performance,” Hall said. “Exports are poised to rebound following a disappointing 2012 that was caused, in part, by sluggish prices.

He said both prices and demand will be up this year.

The transportation sector is another important contributor to Quebec’s export picture, contributing approximately 12 per cent of the province’s total.

EDC’s forecast predicts the sector will grow by 13 per cent this year and 16 per cent in 2014.

“Aerospace exports will be the main driver in Quebec’s transportation story,” Hall said. “The ongoing global recovery and rapid growth in air travel in emerging markets is particularly well suited to Bombardier’s product mix. The environment for business jets is also beginning to stabilize, as are commercial aircraft orders.”

Quebec’s exports to emerging markets accounted for 13 per cent of the province’s total in 2012, up from nine per cent in 2008.

China is the province’s second largest export destination after the U.S., accounting for four per cent of Quebec’s exports.

Industrial goods make up a large share of exports to emerging markets.