Hey there, time traveller!
This article was published 21/5/2014 (862 days ago), so information in it may no longer be current.
Manitoba's economy never seems to attract enough fuel to blast out of its steady growth trajectory.
But this year, when it comes to exports, just about everything is going right.
In Export Development Canada's (EDC) latest forecasts, Manitoba will lead the nation in export growth in 2014 with a 10 per cent bump, the only province to hit double digits.
"It is a great moment for Manitoba," said Peter Hall, EDC's chief economist, who is speaking to a business audience in Winnipeg today. "It's very well-positioned to take advantage of a resurgence of growth starting in the U.S. then the rest of the world. It's a very strong situation for the Manitoba economy across a broad range of industries."
'It's a very strong situation for the Manitoba economy across a broad range of industries'
As always, the diversification of the provincial economy comes into play, but it so happens when it comes to exports from Manitoba, it is dominated by the agri-food sector, which represented 40.9 per cent of total exports in 2013.
Hall said the benefits of the combination of high prices and a bumper grain crop last year will carry forward into this year's export markets, producing another strong 16 per cent increase in agri-food exports in 2014.
"What is amazing about the forecast for this year is that it will still be positive," Hall said. "Normally you would see a negative hit (after such a strong year). What we have in storage is so great this year that even if we have a normal crop year in 2014, the overhang from last year will be enough to extend shipments into 2015 and keep them positive."
EDC is dialing down provincial export growth in 2015 to four per cent, which includes the expectation of only two per cent growth in agri-food exports.
But Grant Lazaruk, CEO of HyLife Ltd., sees plenty of reasons his company could increase its pork exports next year.
As it stands now, the company exports about 75 per cent of its production to countries such as Japan, China and Russia. A newly signed free-trade agreement with South Korea will open up a major new market.
"We used to sell into Korea and with the trade agreement, I can see it becoming one of our top three markets," Lazaruk said.
EDC's theory is although the domestic economy in Canada might be a little stretched -- with disturbingly high debt-to-income ratios and an overheated housing market -- trade is what will drive the economy forward.
Exporters in Manitoba, and the rest of Canada, will be able to use a resurgence in the U.S. economy to compensate for whatever softening might be occurring in the domestic market.
"Orders are piling in at the moment at U.S. factories," said Hall. "They can't serve those with the existing machinery and equipment and building, so they are going to have to add to them. We are looking at a rising wave of investment, starting in the U.S. and spilling over to the rest of the world. That is the dynamic behind what we see with equipment sales from Manitoba and other parts of Canada achieving double-digit status next year."
The U.S. housing market -- the consensus cause of the 2008-09 recession -- is back in a big way. Hall says despite the one million housing starts in the U.S. this year, that is still more than 40 per cent below demand relative to the net increase in households.
Ron Koslowsky, the Manitoba vice-president of Canadian Manufacturers and Exporters, said that surge in the U.S. housing market means Manitoba window manufacturers, for instance -- which became quite depressed when the U.S. housing market crashed -- are back on the upswing.
According to the EDC report, exports of industrial machinery from Manitoba -- which includes agricultural equipment and buses -- was up only 1.4 per cent in 2013 but is expected to grow by nine per cent this year and another 10 per cent in 2015.
Koslowsky said the integrated agriculture-related activities -- from grain production to agricultural equipment to processed-food products -- all have good export growth opportunities.
"When I look at all the sub-sectors, there is no area where the players are worried about the next year," he said. "All are either neutral to positive to very positive."