Dukraft Market News Commodities News Canada just can’t shake its reliance on commodities

Canada just can’t shake its reliance on commodities

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We all know Canada is a commodities export powerhouse.

Less well known is the dramatic shift to commodities from manufactured goods that?€™s occurred in just the last 10 years.

Between 1999 and 2010, the share of commodities exports by value grew to more than

61 per cent from 42 per cent, according to a report Monday by National Bank economist Marc Pinsonneault. More related to this storyCanada's economic core shifts west Over the same period, exports of finished products (cars, machinery and the like) have slipped to less than 40 per cent for the first time since 1983, down from a peak of 57 per cent in 1998. There have been periods when commodities were even more dominant. In 1980, for example, commodities made up 68 per cent of exports by value. The reasons are pretty straightforward. And the big reason is the value of the dollar, which took after 2003. But it?€™s not the only reason. Commodities have also become more expensive. And that in turn has driven up the value of the Canadian dollar, which makes our manufactured goods pricey on world markets. Mr. Pinsonneault pointed out another feature of the commodities surge. Normally, a recession would have hammered demand for commodities. That didn?€™t happen in the recent downturn, most probably because of continuing demand for our energy, minerals and forests in the developing world. Coinciding with the rise of commodities and decline of manufactured exports has been a shift away from the United States. Exports to the United States as a share of the value of exports has slipped 73 per from a high of 84 per cent in 1999. At 73 per cent, it?€™s back to where it was when the Canada-U.S. free trade deal was ratified. Share of total merchandise exports in value terms accounted for by commodities Share of total merchandise exports accounted for by finished goods. Follow Economy Lab on twitter Authors: Commodities - Yahoo! News Search Results

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