There are many reasons to be positive about Ontario’s exports. A resurgent auto sector, high demand from US consumers, and a low Canadian dollar are driving Ontario’s exports in 2016. EDC predicts seven per cent overall export growth this year for Ontario, followed by three per cent growth in 2017. This is the most growth of any province in Canada, and it’s expected to happen in the country’s largest economy.
This is clearly good news for export-minded Ontario companies. They are well positioned to benefit from the wave of demand and current competitive advantages. But strength in Canada’s single-largest exporting province – which makes up about 40 per cent of all national exports – is also great for the rest of the country, especially with the challenges that different sectors and regions are experiencing.
Ontario’s automotive sector is gearing up to meet US demand
In the newly-released Global Export Forecast, EDC predicts that Ontario’s automotive products sector will see 10 per cent growth this year. This is the result of record-high US demand for light vehicles, and higher shipment volumes from assembly plants in Oakville and Windsor, which are now back in full operation following down time for modernization and retooling. As such, Ontario’s exports will get a significant boost from a healthy auto sector, as it accounts for nearly 40 per cent of the province’s exports.
The increasing stateside demand is also helping to reinforce this sector, which has traditionally been critical for Ontario’s economy but has lost many jobs in recent years. “This return of demand for manufacturing is a promising trend for Ontario, which is Canada’s manufacturing heartland” says Peter Hall, EDC’s Chief Economist.
Broad-based gains are expected across many sectors
Looking beyond the automotive sector, EDC’s forecast for Ontario’s exports is solid all around, with few sectors in decline in 2016. For example, the province’s exports of industrial machinery and equipment will see a boost of nine per cent this year, while metals, ores, and other industrial products will increase by five per cent.
Strengthening US economy brings ample opportunity for Ontarians
Now is the time to export for Ontario companies with growth on their radar. “Robust income growth, high employment, rock-bottom gas prices, and considerable pent up demand after years of post-recession thrift are all combining south of the border to create the perfect recipe for demand,” says Hall. “This is having a considerable impact on Ontario’s exports, and we expect that demand to continue going forward, not just in the auto sector but most sectors of Ontario’s economy.”
With the right approach, Ontario companies will be some of the first to see, and capitalize on, emerging opportunities. ““If the locomotive of world growth is the US, Canada is the first wagon, with Ontario sitting firmly in the front row,” adds Hall.
If you’d like to learn more about export prospects for Ontario, please have a look at EDC’s Global Export Forecast: Spring 2016. This resource offers information and insights on the impact of the global economy on all provinces, as well as a variety of key sectors.