Natural resource exports to grow in 2016: EDC
A report out this week says BC’s natural resource export industry should rebound in 2016, providing hope for the north.
After sliding 5% in 2015, mining exports should rise by 5% next year due to an increase in demand from developing countries and world markets.
2015 was obviously a tough year for BC’s oil and gas fields (down 21%), but Chief Economist with Export Development Canada, Peter Hall says things can only get better. “You don’t need to get much of a lift off of that low base and in percentage terms it’s quite impressive, so the 8% growth that we are forecasting it almost purely a price play (on an expected increase in energy prices).”
Forestry accounts for one third of BC’s exports and has saw strong growth since the start of the decade. But Hall says that upswing is coming to an end despite big increases in demand from the US housing market. Housing starts in the US are expected to jump 27% next year.
“The pine beetle infestation led to over-harvesting and those supplies are getting exhausted we don’t actually have enough replacement supply so we are only forecasting 5% growth.”
He added that the softwood lumber agreement is a huge question mark. “There is a new government here in Canada, we are not really sure we have not heard much in the way of statements how will deal with things. And of course there is a lot of pre electioneering that’s going on in the United States that usually raises up protectionist sentiment.”
Cheaper Russian logs entering China are also putting downward pressure on BC forestry growth.