Export growth likely to remain hard fought

Global manufacturing PMI data for November indicate that Canada's non-energy exports will remain broadly stagnant in the near term. The recovery in US home building and auto sales, however, should continue to gain momentum next year, assuming that US policymakers resolve the fiscal cliff in a timely manner. Accordingly, the headwind against Canada's exporters is likely to let up somewhat, with moderate export growth helping to buffer overall GDP growth, as domestic demand weakens.