No Industry Exempt from Global Downdraft

(Export Development Canada – Peter G. Hall)

Canadian exporters have faced significant new-millennium challenges. The irrepressible loonie, increased global competition, a thickening border with our top customer, bottlenecks in trade infrastructure – any one of these would have been challenge enough. Even so, exporters have managed to grow their business and create key success stories, thanks to vibrant global demand. With that key element now gone, export sales have suddenly become tough for all industries.

Exports fell into recession last year, led by a sharp drop in auto sector shipments and ongoing woes in the forestry industry. But at the same time, others were soaring. It was a great time to be producing raw materials: the energy, agri-food and fertilizer industries each saw sky-high gains. Also, exports of other transportation equipment, ores and metals, and industrial machinery and equipment posted respectable gains. The story for 2009 is much more uniform.

This year, there seem to be two categories: bad, and worse. Many of last year’s high-flyers will experience the deepest sectoral declines in 2009 export shipments. Few were not shocked by the extent of the collapse in energy and base metal prices, significant enough to put certain key projects in jeopardy, at least in the short term. Energy sector exports are forecast to tumble by 41% this year, before regaining 16% of the lost ground in 2010. Collectively, ores and metals will see a 33% drop in 2009 before a modest rebound in prices lifts 2010 shipments by 11%. Read more or watch the video version here.