Recession’s Impact Varies by Industry

(Export Development Canada – Peter G. Hall)

A search for Canadian exporters unaffected by the global recession would need a pretty big magnifying glass. Exports have been dented across the industrial spectrum – but the impact has been unequal. Which industries are expected to fare best and worst over the near-term horizon?

Canada’s energy exporters will take the biggest hit in 2009. Prices are a key factor, as the average spot rates for crude oil, natural gas and coal this year are well below 2008 levels. Volume shipments have also been impacted by lower global demand. Technological advances have unleashed large quantities of US shale gas into the North American market, increasing inventories and dampening US demand for Canadian gas. Uncertainty in the global coal market has led to deferral of planned Canadian mine expansions, stunting the near-term export forecast. After falling 43% this year, weak global activity will hold growth in 2010 to just 9%, leaving foreign sales well below peak levels. […]

As unlikely as it may seem, topping the growth charts next year is the auto sector. Volumes will get a needed boost from triple-shift production at CAMI in Ingersoll, increased production of Toyota’s RAV4 in Woodstock and shipments of Oshawa’s hot-selling Camaros. A rebound of parts exports will also help to lift total sector shipments up 16% in 2010. This is good news, but the sector still remains stressed, as 2010 sales levels will still be 30% below what was achieved in 2007. With a few exceptions, the remaining industries will generally follow the national pattern – significant decline this year, followed by a modest rebound that leaves activity levels well below the previous peak.

Read more or watch the video here.