THE sluggish U.S. economic recovery and plunging commodity prices took some of the wind out of Manitoba's export sails this year, but it will be smooth sailing in 2014, the latest forecast from an export credit agency predicts.
Export Development Canada chief economist Peter Hall said EDC now expects Manitoba export sales to grow by only four per cent this year, not the 12 per cent it was forecasting in May.
Hall said a slower-than-expected economic recovery south of the border is the main reason for the downgrade, "but it was related to commodity prices as well," he added.
He said grain and metals prices fell farther than EDC officials anticipated, and that took a sizable bite out of Manitoba's total export sales.
The agency now expects Manitoba exporters to ship out about $11.5 billion worth of goods this year, compared with $11.1 billion in 2012.
But the good news, Hall said during a one-day trade summit Thursday in Winnipeg, is 2014 is shaping up to be a better year for Manitoba and the country as a whole.
The EDC expects Manitoba's export sales to grow by six per cent to about $12 billion in 2014, thanks to a "more fulsome" U.S. economic recovery and Europe finally emerging from the recession.
"I think we're in for some of the most exciting times we've seen in recent years," he told about 95 manufacturing-industry representatives attending the summit, which was organized by the Manitoba division of the Canadian Manufacturers and Exporters.
Hall said not only is the U.S. recovery picking up steam, but a host of key indicators also points to a broad-based global economic recovery in 2014. And that's going to mean a stronger demand for Canadian-made products, including Manitoba-made aerospace components, buses, metals and raw and processed foods such as grain and pork.
"In the agri-food sector, (Manitoba) exports will rise by nine per cent this year before moderating to five per cent in 2014, the EDC says in its revised forecast. "While farmers replenished inventories in 2012-13, the latter part of this year will see stronger agricultural exports with wheat exports forecast to grow by 15 per cent in 2013 and six per cent in 2014."
Hall said Manitoba is also seeing impressive growth in soybean exports, and the outlook for the meat industry is also positive.
The good news for the province's agri-food sector doesn't stop there, he added.
Global food demand is in for a long run of solid growth, and the driver of this growth is the rise of the middle class in emerging markets.
Hall said estimates show China is adding to its middle class by about 40 million per year, India by 10 to 20 million, Indonesia by seven million and Brazil by five million.
These newly enriched individuals will consume more and higher-quality goods and services, "and the place they start is food," he added.