Canada export agency upbeat on 2012 prospects

Thu Apr 19, 2012 1:36pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada's export credit agency released an upbeat outlook for 2012 on Thursday, forecasting 7.1 percent growth in exports on the back of "outstanding" momentum fueled in part by a strong U.S. recovery.

Export Development Canada (EDC) also said exports would grow by 7.3 percent in 2013 and predicted a real, sustainable global recovery would start toward the end of 2012.

Canada is heavily dependent on exports of goods and services, which accounted for just over 31 percent of gross domestic product in 2011. Around 75 percent of all exports go to the United States.

"So far, things are looking good for Canadian trade, and export momentum is outstanding ... I think risk is on the upside for exports this year," said Peter Hall, EDC's chief economist.

Although Canadian exports rose by 10.8 percent in 2011, this figure disguised a major slump in the middle of the year. The pace started to pick up at the end of 2011 and is continuing into this year.

The improved performance comes despite challenges posed by a high Canadian dollar, uncertain foreign markets and tough competition.

Hall told Reuters that the United States and fast-paced emerging markets would be particularly important for Canada.

"U.S. consumers are showing that they're getting back on their feet again," he said in a phone interview, citing sales of autos and new housing as well as a rise in factory orders. "The indebtedness levels are down, their consumption growth has been sustained at a strong pace for quite a number of months now."   Continued...