Canada non-resource exports to surge in 2016 - export agency

By David Ljunggren
OTTAWA, April 25 (Reuters) - Canadian non-resource exports
should post healthy gains this year, the country's trade
financing agency said on Monday, a development the central bank
is counting on to help revive an economy hobbled by weak global
energy prices.
Export Development Canada predicted the consumer goods,
automotive and aerospace sectors would post double-digit growth
in 2016 on the back of a robust U.S. economy. Industrial
machinery exports should advance by 7 percent, it said.
Overall exports are seen rising a modest 2 percent this
year, held back by a 14-percent drop in the value of energy
shipments. Canada is a major energy exporter and has been hit
hard by slumping crude oil prices.
Peter Hall, the EDC's chief economist, said while
commodities are struggling, consumers' need for homes,
furnishings and transportation are rising again.
"Non-resource exports are critical at the moment," Hall
said.
The Bank of Canada is relying on non-energy exports to help
make up for the damage done by low oil prices and rebalance the
economy. The central bank said last week it could take more than
three years for the country to recover.
EDC forecast aircraft and parts exports would increase by 13
percent, in part due to Bombardier Inc 's BBDb.TO new CSeries
passenger jet entering into service, as well as increased demand
for flight simulators and services from CAE Inc CAE.TO .
The agency says motor vehicles and parts exports should rise
by 10 percent as U.S. shoppers replaced older models, while
consumer goods should advance by 14 percent.
EDC said the weaker Canadian dollar helped firms selling
goods to the United States, which takes around 75 percent of all
Canadian exports. The currency hit a 12-year low in January, but
recovered to touch a nine-month high last week.
On Monday, the loonie sat at C$1.27 to the U.S dollar, or
78.74 U.S. cents. CAD/
The Bank of Canada said in an April 13 forecast that the
economy faced downside risks, including a stronger currency that
could drag on non-commodity exports.
"Most businesses I speak to are telling me they were
planning for (dollar) parity, so we are still well below that,"
said Hall, adding that the threats to his forecast included
turbulence in global stock markets and currencies.
EDC expects the energy industry to stage a partial recovery
in 2017, when exports from the sector are forecast to increase
by 18 percent. It sees overall exports up 6 percent in 2017.