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This article was published 6/1/2014 (1106 days ago), so information in it may no longer be current.
It's been a long time coming, but local exporters are finally starting to reap the benefits of the long-awaited U.S. economic recovery.
"For once I think it's a pretty good-news story," said Rob McBain, president and CEO of Ancast Industries Ltd., a Winnipeg firm that produces custom-made cast-iron castings -- parts and components -- for the manufacturers of tractors, construction forklifts and other off-highway machinery and equipment.
"It seems the Canadian dollar is trending in the right direction and the U.S. economy is getting stronger. So I'm cautiously optimistic there will be quite a pickup in demand for manufactured goods in the United States and that we could see double-digit growth in sales to the United States over (each of) the next three to four years."
That optimism is shared by Ron Koslowsky, vice-president of the Manitoba division of the Canadian Manufacturers and Exporters (CME).
"Our members are starting to see stronger sales (to the United States)," Koslowsky said. "2014 definitely seems to be a year where we're going to be seeing some progress, some positive signs, and more good news for our industry."
He said New Flyer Industries has seen a surge in sales of urban transit buses to U.S. municipalities, and Motor Coach Industries is also seeing a pickup in demand for its highway coaches. Local kitchen cabinet and window-and-door manufacturers are also benefiting from the rebound in the U.S. housing market, he added.
Doug Porter, chief economist for BMO Capital Markets, said a strengthening U.S. economy is key to exporters' fortunes in 2014. He said the U.S. economy ended 2013 on a strong note, "and we think it will sustain that momentum in 2014."
BMO is forecasting U.S. economic growth of about three per cent in 2014. That would be a roughly one-percentage-point improvement over 2013's anticipated final figure of just under two per cent.
"A weaker Canadian dollar will also lend a hand in 2014," Porter said, by making Canadian-made goods more attractive to U.S. customers. BMO predicts the loonie will fall below 91 cents US by year's end from its current level of under 94 cents US.
The Canadian dollar started 2013 above parity with its U.S. counterpart at $1.01 US. But as the U.S. dollar gained in strength and prices for commodities such as oil and gold began to weaken, the loonie began losing ground.
With the Bank of Canada not expected to raise its trendsetting interest rate until 2015, most analysts are predicting the loonie will continue to weaken in 2014.
McBain said exports to the United States account for about 35 per cent of Ancast's annual sales, and they plummeted by about 40 per cent during the 2009/10 global recession. That forced the company to pare back its workforce to about 100 workers. Their hours also were reduced to three days a week as part of a work-sharing program.
It wasn't until about a year ago Ancast's U.S. sales finally started to perk up again.
"It's been kind of slow, steady growth the last 12 months," McBain said, adding its sales are almost back to pre-recession levels. That has enabled the company to build its workforce back up to about 160 workers, with all of them now working five days a week.