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Natural resources lead the pack in export growth

OTTAWA, Ont. Exports of lumber and sawmill products as well as a resurgence in automotive and live animal products showed continued strength in October although they could not surpass the gains made by the energy sector.

Exports of lumber and sawmill products were strong in October, rising 10.9% to $1.6 billion, as rebuilding along the Gulf of Mexico in the United States sparked an increase in price and volumes.

“This was the first substantial increase since the record high set in May 2004, when high lumber prices and a relatively soft Canadian dollar (US 72 cents) ensured a prosperous market for lumber and sawmill products,” Statistics Canada comments in its Daily Bulletin.

Since that time, export volumes of lumber and sawmill products have been relatively stable. However, the Canadian dollar has appreciated substantially (to over US 84 cents), resulting in lumber producers receiving lower prices for their merchandise, which is quoted in US dollars.

Automotive product exports continued their four-month upward trend on the strength of passenger vehicles, which increased 5.3% in October to $4.1 billion.

The lifting of the US ban on live cattle under 30 months in July continues to feed the resurgence of live animal exports, which increased 12.0% to $218.1 million. This level is comparable to the months preceding the ban, but still well below the record high of $245.4 million achieved in February 2002.

The disruption to natural gas production as a result of hurricane damage on the Gulf Coast continued to push up natural gas prices in October. As a result of the price increase, there was a sizable gain (+10.0%) in the value of natural gas exports to the United States, according to Statistics Canada’s monthly records.

As in September, natural gas prices fuelled the overall increase in exports. Excluding energy, exports were relatively flat (+0.1%) for the month of October.

Energy is now Canada’s largest export sector, weighing in at $9.2 billion. Energy has surpassed the machinery and equipment ($7.9 billion) and automotive ($7.8 billion) sectors, which had exchanged the title of largest export sector back-and-forth for many years.

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