Hollywood A-listers such as Brad Pitt and Lindsay Lohan carry a BlackBerry. Tokyoites dine on Canadian beef bought at their neighbourhood grocery store. Belgium buys a quarter of our country's zinc exports. Yes, Canadian products are popular around the world, but a strong dollar makes them more expensive and less appealing to importers.
The loonie will appreciate and average US$0.90 in 2007, predicts Paul Ferley, assistant chief economist for BMO Financial Group in Toronto. Yet he anticipates modest export growth. “The pace of our dollar's appreciation matters,” Ferley explains. That rate will be slower in 2007 than in previous years, and it all will occur against a backdrop of a growing global economy. “As a result,” says Ferley, “the high Canadian dollar will be less of a constraint on export growth.”
What about imports? In 2007, the flow of foreign goods into the country should be similar to levels in 2006, Ferley forecasts. He expects companies will continue to invest in their businesses, keeping imports of machinery and equipment stable. As well, he believes Canadians' purchases of foreign consumer goods will remain strong in 2007. That could mean another good year for some retailers. “We hit record home furnishing imports in 2006,” says Diana Wyman, an analyst for the international trade division of Statistics Canada. “Fruit and vegetable imports were also way up in 2006.”
Ferley's take on trade is partly based on an optimistic outlook for our biggest trading partner. He points out: “We're expecting the U.S. economy to moderate but expand at a healthy pace in 2007.”