Metals driving Ontario export growth

Ontario’s international exports are set to grow by 8% this year, and by another 4% in 2014, says Export Development Canada’s global export forecast.

“Ontario’s exports will get a huge boost this year thanks to a double-digit surge in metal exports,” said EDC chief economist Peter Hall during a talk in Ottawa today.

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He adds, “The boost is timely. After a few years of double-digit gains, the automotive sector will slow considerably, held back by tight capacity. Revival of U.S. private investment will be really good for Ontario’s machinery and equipment industry this year and next.”

The industrial goods sector, which includes ores, minerals and metals exports, accounts for approximately 34% of the province’s exports. EDC’s forecast calls for export growth of 15% in 2013 and 2% in 2014.

“Ontario mineral producers can expect to ship a lot more volume in 2013, which will help to offset lower base metal prices,” says Hall. “Metals and mining will be the star performer on Ontario’s export stage this year.”

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He also finds, “Gold production will jump by over 20%, while nickel output will be more muted. Add to that chemical manufacturing, which will spike towards the end of the year, to round out a solid sectoral performance.”

The transportation sector is a historically important contributor to Ontario’s export picture, contributing approximately 36% to the province’s total shipments. EDC’s forecast predicts the sector will expand by 4% this year and 3% in 2014.

“The automotive industry, the province’s largest export sector, will feel the slowing over the next two years, but…it has sustained the brisk expansion seen since the crisis,” says Hall.

He adds, “U.S. demand for passenger vehicles is soaring, but the closing of GM’s Oshawa plant will reduce Ontario’s production capacity by about half a million units in 2013. Despite the production loss, Ontario is still doing quite well over all.”

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Nationally, Canadian merchandise exports are forecast to rise 9% in 2013 and 5% in 2013, while economic growth is expected to rise 2.2% over 2013. That will slow to 1.9% the following year.

EDC is forecasting global growth of 3.6% in 2013 and 3.9% in 2014.

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