BMI View: D omestic consumption and exports of Canadian metal products will be supported by both Canada's positive fundamentals and the country's exposure to a recovering US and Mexico. With much of Canada's metal production exported, a weaker Canadian dollar against the US d ollar will encourage refined exports. Therefore, we forecast modest production and consumption growth across the Canadian metals complex through 2017 .
Our forecast for strong economic fundamentals in Canada, the US, and Mexico, combined with a weaker Canadian dollar (CAD) in the coming years, leads us to forecast the Canadian metals sector will see expansion through 2017. We forecast the CAD/US$ exchange rate to average 1.05 through the end of 2013, weakening to yearly averages of 1.17 in 2015 and 1.20 in 2016, before coming back down to 1.17 in 2017. Since Canada is a significant exporter of aluminium, nickel, and steel to the US, and to a lesser extent Mexico, this exchange rate dynamic could boost Canadian exports to end users in the US and Mexico. We expect increasing metals demand from Canada to both the US and Mexico as both see broad recovery in their real GDP growth and increasing manufacturing and investment activities. We maintain forecasts for real GDP growth of 2.8% and 3.3% in the US and Mexico, respectively, in 2014. Looking through 2017, we see real GDP growth averaging 2.6% in the US and 3.6% in Mexico.
| Cyclical Components Suggest Sustained Fixed Investment Growth Ahead |
|US - Residential Construction, Business Investment & Durable Goods Purchases, % of GDP|
On the domestic front, we see positive prospects for the auto manufacturing and infrastructure sectors, boding well for steel and aluminium, in particular. Steel and aluminium are the two main components of Canada's metals sector. We forecast Canada's infrastructure industry will grow 4.4% on average per annum from 2014 through 2017, with investment into oil and gas pipeline infrastructure growing 5.2%....
The Canada Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in Canada.
BMI's Canada Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in Canada.
- Benchmark BMI's independent metals industry forecasts for Canada to test other views - a key input for successful budgeting and strategic business planning in the Canada metals market.
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Summary of BMI's key forecasts and industry analysis, covering metals production and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the state's metals sector, business environment, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.
Global Metals Market Overview
Global demand, supply and price forecasts for steel and aluminium, as well as gold, copper and tin, drawing on both our industry expertise and our macroeconomic and financial market team's long-term global demand forecasts and shorter-term market views.
Historic data series and forecasts to end-2017 for all key industry indicators (see list below) supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
Production (`000 tonnes, US$bn), consumption (`000 tonnes, US$bn), exports (`000 tonnes, US$bn); prices (US$/tonne), and growth (%).
BMI forecasts to end-2017 for headline country macroeconomic indicators, including real GDP growth (%), GDP per capita (US$), population (mn), industrial production index (% y-o-y average) and unemployment (% of labour force).