Canada’s exports will return to prerecession levels next year, powered largely by gains reaped from the high price of oil, but a recovery in the long-struggling lumber business is also helping, according to Export Development Canada. The global recession wiped out almost a quarter of Canadian exports. But a rebound has come quickly, mostly because of high commodity prices for many products, including oil and coal.
Total international exports are forecast to rise 12 per cent this year, double EDC’s earlier forecast. The increase is due to additional strength expected in the United States, which buys about three-quarters of Canadian exports. A further gain of 7 per cent is predicted for 2012, which would push the value of goods and services Canada sends to the world to almost $530-billion.
A recovery in U.S. housing will underpin gains in forestry, particularly lumber and other wood products for building, said EDC, the federal government’s export credit agency.
While members of the private sector – executives, investors and analysts – also expect a sharp recovery in U.S. housing to eventually lift forestry, the EDC forecast is more bullish. In 2012, EDC predicts one million housing starts, much higher than the expected 700,000 this year.
Buoyed by U.S. housing starts and bolstered by exports to China, EDC predicts a 9-per-cent gain in forestry exports this year and a 13-per-cent jump next year. Almost all the growth is in lumber and wood products – as opposed to pulp and paper – and it would make the wood segment the No. 1 business in forestry at $14.5-billion in 2012, compared with $8.7-billion in 2010.