The US economy finally seems to be picking up and hopes are that Canada will benefit from its increased consumer and construction spending over the coming year or two, compensating for our currently weak domestic markets.
Perhaps the biggest challenge to Canada’s export income at the moment is the softness in prices for our foundation export products – notably lumber and commodities. The high lumber prices of last year drove increased production over the past few months, resulting in a current oversupply. This has caused a drop in price that will probably be temporary, but when combined with the increased domestic production of oil and gas in the US and an associated decrease in demand and price for Canadian energy resources, it is clear that Canada needs to look further afield for growth opportunities.
The Peter Andersen Monthly Economic Report goes into the situation in more detail at http://village.vistage.com/docs/DOC-36132, and you can find further discussion on the US oil-production boom at http://www.theglobeandmail.com/report-on business/economy/economy-lab/us-shale-oil-boom-could-re-write-the-canadian-economys-oil-story/article12423270/
- Welcome to the golden age of shale gas (macleans.ca)
- Energy trade key to Canada’s economy (business.financialpost.com)
- Are Falling Lumber Prices Really a Bad Sign? (dailyfinance.com)