Canada’s export financing agency says growth in shipments of goods abroad will quicken to 9 percent this year from 1.9 percent in 2012 as U.S. housing and business investment picks up.
The pace of export growth will slow to 5 percent in 2014, Export Development Canada chief economist Peter Hall wrote in a report today.
Canada sells three-quarters of its goods to the U.S., with lumber, machinery and energy goods among the most-important products. Exporters may benefit from higher orders because consumer and business demand is leading the U.S. economy as government spending is curtailed, according to the EDC report.
“Consumer spending is vibrant again, this time without diving into debt,” Hall said about the U.S. in a semi-annual Global Export Forecast. “Already in comeback mode, business investment has only just begun.”
U.S. growth will accelerate from 2.3 percent this year to 3.3 percent next year, according to the report. The world economy will grow 3.6 percent this year and 4.2 percent in 2014. Canada’s dollar will weaken to an average of 97 U.S. cents this year and 96 U.S. cents next year, EDC predicted.
EDC’s export forecast is more optimistic than the Bank of Canada’s assessment last week, which said exports are being hobbled by a strong Canadian dollar and the need for companies to invest more and regain competitiveness.
The agency’s forecast for 2.2 percent growth in Canada this year and 1.9 percent in 2014 compares with the central bank’s outlook for expansions of 1.5 percent and 2.8 percent.