Quebec exports to rise 7% despite U.S. trade uncertainty
After shrinking slightly in 2016, Export Development Canada is forecasting that exports from Quebec will grow seven per cent this year and in 2018.
“When you look at how Quebec is doing this year, you’ve got an aerospace sector that’s up 11 per cent, you’ve got an aluminum production sector that’s up 15.5 per cent on a year-over-year basis, you’ve got iron ore mining that’s up 10 per cent, engines, turbines, power transmission equipment up 23.6 per cent, these are some pretty impressive numbers,” said Peter Hall, EDC’s chief economist. “What I believe this is indicating is that the global recovery is coming home in terms of orders that our businesses are processing.”
While the 2017 forecast puts the Quebec export growth below the Canadian average of eight per cent, in 2018 only Newfoundland and Labrador is expected to see exports grow by a larger percentage.
The aerospace sector is expected to drive much of that growth.
“We see 16 per cent growth in 2018 for the aerospace sector, it really has a lot to do with sales of the (Bombardier) C Series,” he said.
Hall credits the expected rise in exports to worldwide economic growth.
“There’s a revival that’s going on in world growth and principally in the United States,” Hall said.
That growth is being driven by natural market forces, he said.
“We clearly had a massive bubble ahead of the great recession, and when that’s the case, you usually have a protracted recovery period,” he said. “The world seems to be getting on its feet and the U.S., our No. 1 customer, is actually leading that charge.”
But while strong growth in the U.S. may be good for exporters in the short term, the protectionist stance taken by the U.S. administration is cause for concern.
“Anytime your No. 1 partner is starting to back away from the table, you’re going to be very worried about that, 75 per cent of our trade we do south of the border in the United States, so it’s something to really be worried about,” Hall said.
But, he said, it’s important not to be overly concerned about NAFTA being scrapped.
“I think when you reflect on the cost to the average American of tearing-up NAFTA, they’re not going to go for that, regular people will not go for it.”
While looking to other markets is always a good strategy, he said, Canadian exporters do so much business with the U.S., it would be impossible to replace that market anytime soon. Still, Hall is optimistic. “We believe that growth is here to stay and that, fundamentally, we’re still going to have the same free trade agreement tomorrow that we have today.”