Build­ing-prod­uct mar­ket con­tin­ues to grow

Winnipeg Free Press - Section F - - SHOW HOMES - By Mike Moore

For the past seven years, Canada has been a net im­porter of build­ing prod­ucts and ma­te­ri­als. Prior to that, a healthy U.S. mar­ket en­sured a solid de­mand for our raw and man­u­fac­tured ma­te­ri­als — Cana­dian ex­ports were a valu­able re­source south of the bor­der and through­out the world.

How­ever, when the hous­ing crash took place, ex­ports of Cana­dian build­ing prod­ucts fell by more than 40 per cent be­tween 2007 and 2009. Al­though there has been a grad­ual in­crease of about two per cent per year, it’s not enough to get back to where we were.

The Cana­dian hous­ing mar­ket did not fall nearly as dra­mat­i­cally as the U.S. mar­ket and also re­bounded con­sid­er­ably faster, so our de­mand for build­ing prod­ucts has grown ac­cord­ingly. As re­cently as 2012, we spent twice as much on im­ports as we brought in from ex­ports.

That trend slowed a bit last year, largely due to a slow­down in hous­ing starts in some larger Cana­dian ur­ban cen­tres. How­ever, things look brighter for the im­me­di­ate fu­ture, and it’s not be­cause of re­duc­tion, but rather growth.

Amer­i­can hous­ing starts are pro­jected to con­tinue to climb in 2014, in­creas­ing de­mand for Cana­dian build­ing prod­ucts and boost­ing our ex­port mar­ket. Re­cent trends in­di­cate that wood, petro­chem­i­cal and asphalt prod­ucts are ex­pe­ri­enc­ing the largest growth. Ex­ports of ma­sonry, elec­tri­cal and paint prod­ucts are grow­ing more mod­estly, but they are still in­creas­ing. Th­ese are off­set in part by de­clines in steel, tools and ma­chin­ery. In that the Cana­dian man­u­fac­tur­ing sec­tor is closely tied to the U.S. econ­omy for ex­ports, a re­cov­ery in their hous­ing mar­ket is good news north of the bor­der.

If there is one les­son to be learned from this, it’s that we must con­tinue to di­ver­sify, both in terms of ex­ports and im­ports. When the United States stopped buy­ing, Canada stopped pro­duc­ing in some sec­tors and that hurt our econ­omy.

Sim­i­larly, we were too heav­ily re­liant upon our Amer­i­can neigh­bours for im­ports of build­ing ma­te­ri­als. When they stopped buy­ing their own prod­ucts, they stopped man­u­fac­tur­ing, and we were forced to look else­where. Canada has gone from a 75-per-cent U.S. de­pen­dency for im­ported build­ing prod­ucts 15 years ago to less than 60 per cent to­day. China has been the largest ben­e­fi­ciary of this shift.

Canada must be mind­ful to en­sure that we have a bal­anced or even pos­i­tive im­port-ex­port ra­tio with China and other coun­tries to en­sure the health of our producers. Mike Moore is pres­i­dent of the Manitoba Home­builders’ As­so­ci­a­tion.

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