But the organization’s language might sound equally obscure. Peter Hall, EDC’s chief economist makes it all clear: “Years of sluggish growth have convinced us that weakness is here to stay, especially in light of the significant public spending cuts around the globe. This ‘new normal’ thinking is masking a very good business story.”
For this year—and next—the public fiscal drag is expensive, he continues. “[It is] costing the world’s advanced economies 1.2 per cent of GDP.”
That’s a huge hit, he points out. But it also indicates a positive: “It also means that there is a faster-growing side of the economy that’s keeping world output increasing.”
That growth, he continues, comes from the private sector in the United States and fast-paced emerging markets – a space where Canadian exporters play.
In the recently changing global economic stage, Canada has risen from a supporting actor to a leading player. Indeed, EDC forecasts that the Canadian economy will grow by two percent in 2012 and slightly better in 2013 (2.2 percent). Canada’s trade with the rest of the world, EDC observes, is a key driver of the outlook.
As Hall says, it might not look attractive on the surface. “But what are many calling ‘new normal’ growth is a faster-paced global economy, full of opportunity,” he observes.
How are things looking so far? Good for Canadian trade, with its outstanding export momentum.
All told, Canadian exports are projected to rise 7.1 percent in 2012 and 7.3 percent in 2013. This follows 10.8 percent growth in 2011. EDC believes that all of Canada’s regions—and the bulk of its broad industry sectors—will share in the development.
Indeed, this is a positive scenario in a world looking for good news.
EDC’s forecast notes that Canadian merchandise exports are already up 5.3 percent over last year’s levels. Any further growth this year will move the figure higher, EDC adds.
Further, US economic momentum should spur growth for Canadian exporters in a broad range of industries. That’s an important part of EDC’s forecast, which stems from a detailed analysis of the American economy. Implications are clear; after all, the US represents Canada’s largest trading partner.
Looking ahead, EDC predicts that the US economy will rise three percent next year, even as fiscal contraction takes 1.3 percent away from GDP growth. The forecast implies an underlying rate of private-sector, business-driven growth that looks much more like a true recovery.
Canadian exporters will also benefit from continued diversification of sales into fast-growing emerging markets, EDC expects. Emerging market export growth will be broadly-based across global regions, but the hot spot will be the emerging Asian sector, which recorded 13 percent growth this year and is anticipated to record 16.6 per cent growth in 2013.
All of this leads Hall to be a weatherman who reports a positive forecast. “We see a real, sustainable recovery beginning toward the close of 2012,” he says.
Canada stands to benefit for a number of reasons, he adds, but the greatest challenge may be in finding the capacity to accommodate the growth coming its way.
That’s the kind of challenge that’s gladly embraced.
EDC’s semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest and exchange rates, as well as export strategies to help Canadian companies minimize risk. EDC also analyzes a range of risks for which exporters should be prepared. The forecast is available on EDC's website (www.edc.ca/gef). Canada’s export credit agency, EDC—a recognized leader in financial reporting and economic analysis—offers innovative commercial solutions to help Canadian exporters and investors expand international business. Each year, EDC’s knowledge and partnerships are used by more than 7,700 Canadian companies and their global customers.