Agriculture, forestry brighten B.C. exports
Agriculture will continue to be one of the sources of strength for British Columbia’s exports this year and next with growth coming from sales into Asia, Export Development Canada predicts, even with the slowdown in China’s economy.
Forest products remain B.C.’s biggest export sector, which should benefit from a strengthening U.S. housing market, the credit agency’s chief economist Peter Hall said in Vancouver on Thursday.
However, agriculture’s stature is increasing in magnitude and EDC forecasts it is set to grow by seven per cent in 2016 as China and other Asian economies become more important customers.
Overall, EDC is forecasting that B.C.’s total trade will show a mod- est two per cent increase this year, followed by five per cent next year as growth in the hot sectors of forestry and agriculture offset weakness in energy exports.
“(Agriculture) is getting up to 10, 11 per cent as a total share of B.C.’s share of merchandise exports,” Hall said. “So that’s quite significant.”
And while the slowdown in China’s economy has crimped commodity prices that have hurt Canada’s mining sector, Hall said China’s economic strategy to boost consumer spending, as opposed to infrastructure development, should feed into B.C.’s export growth.
“We’ve always had success selling in the U.S. and it’s a lucrative market,” Hall said, “but more and more, sales into China are becom- ing more significant.”
Farmed salmon, wild sockeye and crab have been B.C.’s top exports to China in previous years, and Hall said that is where EDC expects the demand to continue rising, but other crops such as fruits and vegetables should also benefit from increasing trade.
Hall was in Vancouver for an EDC-related event, held in conjunction with Canadian Manufacturers & Exporters, aimed at encouraging Canadian companies to focus on increasing the export component of their businesses.
Hall said the global economy is sluggish and the decreasing value of B.C.’s energy exports (EDC forecasts that those will decline 10 per cent this year) make it look like B.C. is having a tougher time than it is on the trade front. However, he believes exporters can find opportunities.
“China and India both have a fast-growing middle class and U.S. consumers and businesses have money to spend,” Hall said. “Growth is coming — it’s just a matter of being well positioned when it arrives.”
Hall said a noticeable increase in the workforce participation rate in the U.S. among so-called millennials is another bright spot for B.C.’s prospects to export.
Workers between the ages of 20 and 34 were hard hit by the 200809 recession and economic downturn, and EDC believes that “finally, after seven years, millennials are coming back into the economy.”
Hall characterized the demographic as “leading-edge consumers,” who have the potential to exert a big influence on housing construction if they start buying first homes. That, in turn, would boost demand for B.C. forest products, among other exports.