WINNIPEG —; Thanks to the diversification of its export economy, Manitoba’s exports will grow by four per cent in 2016 and five per cent next year, according to Export Development Canada’s semi-annual Global Export Forecast.
This steady growth, continuing on from last year, is the product of strong performances across all the province’s export sectors, particularly agri-food and manufacturing. Manitoba stands as one of the most diversified export economies in Canada.
“When it comes to exports, we all envy Manitoba. Even though oil exports have fallen off, other sectors have made up for it. Diversification is what you want. It provides stability that the economy can rely on in volatile times like we’re experiencing now,” said Peter Hall, EDC’s Chief Economist.
Agri-food, which is Manitoba’s largest export sector and accounts for more than one-third of the province’s exports, will see overall growth of two per cent this year, followed by five per cent in 2017.
This positive outlook is being driven by pork meat and hog exports, with increasing Asian demand coming off the heels of the Canada-Korea Free Trade Agreement (FTA). EDC also expects Manitoba to benefit from U.S. pork production dropping back to normal levels after years of record-highs.
Within the agri-food sector, Manitoba’s oilseeds and pulse exports will also perform relatively well this year and next. The strength of these sub-sectors will help offset this year’s decline in wheat exports. Despite relatively strong wheat production in the province, global demand for wheat is expected to be weaker due to high inventories and strong production from the United States, China and India.
The manufacturing sector is another bright spot in the province’s export outlook, with motor vehicles experiencing a 22 per cent increase and aerospace a 16 per cent increase this year. Companies like New Flyer Industries, a bus manufacturer, are leading the charge with several important contract wins in 2016.
“New Flyer Industries specialized in heavy-duty buses, focussed on innovation and now they are a leader in North America for this technology. They’ve been so successful in part because they know how to sell into markets outside of Canada,” noted Hall.
While provincial exports will continue to rely heavily on the strength of the U.S. economy, the diversity of Manitoba’s exports presents opportunities in emerging markets as well.
“Export growth is still mostly about U.S. demand, however, Manitoba companies and producers have the opportunity to gain entry beyond North America because of the variety and types of products they are selling. It’s not just hogs and wheat, but also pharmaceuticals and clean technology,” added Hall. “Growth is coming and now is the time for Manitoba exporters to look beyond the United States and capitalize on the international opportunities before them.”
Mr. Hall will be joining local businesses people today at the RBC Convention Centre in Winnipeg to discuss the export outlook for Manitoba and Canada.
The event is being held in collaboration with Manitoba Trade and Investment. Over the past month, Hall has been travelling across Canada for EDC’s Let’s Talk Exports tour, which offers insights on the current global economy and explores how economic trends will impact Canadian companies and exporters.
Visit EDC’s Global Export Forecast: Spring 2016 to learn more.
About EDC is Canada’s trade finance agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on
commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.
Some of its services include the Export Guarantee Program to help exporters access more financing, direct financing in support of contracts and direct investment abroad, Foreign Exchange Facility Guarantees to help exporters manage foreign exchange risk, and Political Risk Insurance that can cover up to 90 per cent of losses from political risks in foreign markets.
EDC’s economics team includes some of Canada’s leading trade experts, who share their knowledge freely with Canadian companies looking to grow their international sales and help them manage the associated market risks. Its semi-annual Global Economic Forecast addresses the latest global export conditions, including providing perspectives on leading economic trends and export strategies to help Canadian companies of all sizes maximize their export growth.
The forecast also analyzes a range of risks for which exporters should be prepared.