Surging U.S. demand and the lower Canadian dollar should help offset the impact on Canadian exports of the dramatic fall in oil and gas prices, according to Export Development Canada.
Canada's export growth this year is forecast to be flat at one per cent, but expected to jump to 7 per cent in 2016, the country's trade finance agency said on Thursday.
An anticipated plunge of Canadian energy exports of 23 per cent in 2015 will overshadow double-digit export growth for 6 out of 12 export categories, the EDC's semi-annual global export forecast report said.
The drop in benchmark crude prices to the $50-a-barrel range last year from a peak of more than $100 has forced Canadian energy companies to slash spending and lay off workers.
But continued strong external demand and rebounding energy prices are forecast to help boost exports to 7 per cent growth in 2016.
A lower Canadian dollar and strong demand will translate into a 17 per cent increase in aerospace exports this year and 19 per cent growth in 2016 with the entry into service of Bombardier Inc.'s C Series jetliner and a strong industry backlog of orders, the EDC forecasts.
Automobile exports are slated to increase 13 per cent this year but flatten out to one per cent in 2016 as production runs at capacity.
Thanks to the lower value of the loonie against the U.S. greenback and robust U.S. economic and housing growth, forestry exports should expand by 7 per cent in 2015 but slow to 3 per cent next year due to a fading currency effect and reduced supply from British Columbia.
"Surging U.S. demand has gobbled up the spare capacity in its industrial machine," EDC chief economist Peter Hall said.
"Producers are cash-rich, and are looking for new places to invest their surplus capital."
These and other factors represent a significant opportunity for Canadian companies, he said.
"Things are tight stateside, and if businesses can't add capacity in the U.S., they'll look to their neighbours for help. If ever there was a time for businesses, whether small, medium or large, to start exporting to the U.S., it's now."
Mr. Hall also cautions that risks in the global economy remain.
"The global economy is nearing the end of its high-wire act, but there are still a lot of pretty big post-crisis risks lurking out there, and it's important that businesses insure their activities against these risks.
"Despite significant progress, there's still a serious fiscal situation in Europe. Commodity prices are unstable. Geopolitical risks abound in Russia, the Middle East, and central Africa, to name a few. These risks and others should always be considered and, where possible, mitigated."
The U.S. buys about three-quarters of Canada's exports, but EDC says Canadian exporters have diversified significantly to emerging markets over the past few years; those markets now represent about 12 per cent of total exports, compared with 5 per cent 15 years ago.
EDC forecasts growth of 3.6 per cent in the U.S. economy this year and 3.3 per cent in 2016.
The outlook for Canadian GDP growth in 2015 and 2016 is 2.4 per cent, according to the agency.