transportation trends 2017 - citttransportation trends 2017 kevin chiang, cfa research analyst....
TRANSCRIPT
Lou Smyrlis,
Group Publisher
&
Research Director
TRANSPORTATION TRENDS 2017
Kevin Chiang, CFA
Research Analyst
Survey Demographics
Shipper Volume & Pricing Projections
Current Capacity Picture
Road and Rail Thesis
Key Indicators to Watch
Questions
Today’s Agenda
TRANSPORTATION TRENDS 2017
TRANSPORTATION TRENDS 2017
Source: Statistics Canada, Transport Canada, Canada Cartage infographic
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends 2016, Newcom Business Media
49% spending over $1M on supply chain
Survey Demographics
Shipper Volumes & Pricing Projections
Current Capacity Picture
Road and Rail Thesis
Key Indicators to Watch
Questions
Today’s Agenda
TRANSPORTATION TRENDS 2017
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends 2016, Newcom Business Media
34.1%
4.7%
61.2%
Regional distribution
Western Canada Eastern Canada Central Canada
7%
16%
4%
34%
25%
7%
8%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Freight forwarder
Third-party logistics
Resources
Manufacturing
Distribution
Wholesale
Retail
Sectors represented
TRANSPORTATION TRENDS 2017
16%
16%
6%
14%
6%
15%
9%
6%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Less than $5million
Over $5 million to $15million
Over $15 million to $30 million
Over $30 million to $60 million
Over $60 million to $100 million
Over $100 million to $500 million
$Over $500 million to $2 billion
Over $2 billion
Estimated annual sales
15%
21%
8%
23%
12%
7%
15%
0% 5% 10% 15% 20% 25%
Under $100,000
$100,000 to $500,000
$500,000 to $1 Million
$1 Million to $5 Million
$5 Million to $10 Million
$10 Million to $20 Million
$20 Million or more
Transportation spend
Source: Transportation Buying Trends 2016, Newcom Business Media
TRANSPORTATION TRENDS 2017
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Printing/Publishing
Forestry/Forestry Products
Agriculture
Pulp and Paper
Services
Utilities
Industrial Products
Construction
Pharmaceuticals/Medicine/Health
Textiles
Metals
Chemical and Allied Products
High Tech
Automotive
Food and Kindred Products
Transportation
Consumer Products
Other (please specify)
Industries represented
Source: Transportation Buying Trends 2016, Newcom Business Media
Survey Demographics
Shipper Volumes & Pricing Projections
Current Capacity Picture
Road and Rail Thesis
Key Indicators to Watch
Questions
Today’s Agenda
TRANSPORTATION TRENDS 2017
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey, Newcom Business Media
DOSE OF REALITY
2016
• Only 34% actually increased freight volumes in 2016
• 31% actually decreased freight volumes in 2016
• 31% kept volumes about the same as previous year
7%
9%
15%
31%
24%
5%
5%
3%
0% 5% 10% 15% 20% 25% 30% 35%
Down more than 20%
Down 10-20%
Down 5-10%
About same
Up 5-10%
Up 10-20%%
Up more than 20%
Not sure
Freight volume trends 2016
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey, Newcom Business Media
DOSE OF REALITY
2016
• Only 34% actually increased freight volumes in 2016
• 31% actually decreased volumes in 2016
2017
• 0nly 54% expect freight volume increases in 2017
• 41% expect flat freight volumes in 2017
71%
60%58%
52%
43%
27%
46%
60%
50%53%
58% 58%
46%
54%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Shippers projecting freight volume increase compared to previous year
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey 2016, Newcom Business Media
DOSE OF REALITY
• In 2016 43% of Eastern Canada shippers increased their freight volumes and 27% decreased their freight volumes
• In 2017 56% of Eastern Canada shippers expect to increase their freight volumes; 41% expect freight volumes to be about same
Eastern Canada Shippers
TRANSPORTATION TRENDS 2017
DOSE OF REALITY
• In 2016 only 22% of Western Canada shippers increased their freight volumes and 37% decreased their freight volumes
• In 2017 53% of Western Canada shippers expect to increase their freight volumes; 39% expect freight volumes to be about same
Source: Transportation Buying Trends Survey 2016, Newcom Business Media
Western Canada Shippers
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey 2016, Newcom Business Media
23%
30%
41%
16%
32%
23%
15%
20%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Rail
Truckload
LTL
Private Truck
Courier
Marine
Air Cargo
Intermodal
Anticipated increase in use of mode 2017
Survey Demographics
Shipper Volumes & Pricing Projections
Current Capacity Picture
Road and Rail Thesis
Key Indicators to Watch
Questions
Today’s Agenda
TRANSPORTATION TRENDS 2017
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey, Newcom Business Media
2015
28%
40%
46%
22%
47%
34%
34%
31%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Rail
Truckload
LTL
Private Truck
Courier
Marine
Air Cargo
Intermodal
Shippers expecting base rate increases by mode in 2017
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey 2016, Newcom Business Media
7%
27%
24%
16%
6%
14%
7%
0% 5% 10% 15% 20% 25% 30%
Rail
Truckload
LTL
Courier
Airfreight
Marine
Intermodal
Modes expected to wield greatest pricing power in 2017
Survey Demographics
Shipper Volumes & Pricing Projections
Current Capacity Picture
Road and Rail Thesis
Key Indicators to Watch
Questions
Today’s Agenda
TRANSPORTATION TRENDS 2017
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey 2016, Newcom Business Media
4.50
4.04
3.76
4.24
3.56
4.32
4.07
4.27
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00
Rail
For-Hire Truckload
For-Hire Less than Truckload
Private Fleet Truck
Courier
Marine
Air cargo
Intermodal
Canadian shipper perceptions on available capacity by mode (5 = balanced capacity; 10 = very tight capacity)
TRANSPORTATION TRENDS 2017
Source: Transportation Buying Trends Survey, 2016 Newcom Business Media
5%
20%
55%
7%
1%
13%
0% 10% 20% 30% 40% 50% 60%
Well above normal levels
Above normal levels
Around normal levels
Below normal levels
Well above normal levels
No opinion
Shipper views on competitive activity between modes
Well below normal levels
TRANSPORTATION TRENDS 2017
Source: Equipment Buying Trends Survey 2016, Newcom Business Media
TRANSPORTATION TRENDS 2017
Source: Equipment Buying Trends Survey 2016, Newcom Business Media
TRANSPORTATION TRENDS 2017
Source: Equipment Buying Trends Survey 2016, Newcom Business Media
CONFIDENTIAL
2017 Transportation Buying Trends Survey
CIBC Freight OutlookKevin Chiang, CFA
Research Analyst
416-594-7198
Key Themes
1. Economic backdrop improving with a more constructive outlook on manufacturing
2. Headwinds becoming modest tailwinds
3. Freight volumes have stabilized reflecting improved macro backdrop and easier comps
4. Freight pricing has stabilized reflecting improved capacity supply/demand balance and sequential volume
improvement
5. Weaker C$ -> starting to see some benefit
6. Political uncertainty the wild card
CONFIDENTIAL
Economic Outlook – Canada Bouncing Off The Bottom
CIBC World Markets Inc., StatsCan
CONFIDENTIAL
2015A 2016F 2017F 2018F 2015A 2016F 2017F 2018F 2015A 2016F 2017F 2018F
BC 3.3 2.6 2.1 2.2 3.8 3.8 3.9 4.4 6.2 5.8 5.5 5.2
AB (3.6) (2.2) 1.7 1.3 (12.5) (5.2) 6.7 4.8 6.0 7.9 8.4 8.0
SK (1.3) (0.7) 1.8 1.4 (5.7) (3.0) 5.8 4.9 5.0 6.2 6.2 6.1
MB 2.2 1.6 1.7 1.8 3.1 2.8 3.5 4.0 5.6 6.0 5.9 5.8
ON 2.5 2.5 2.1 2.3 4.9 3.7 3.9 4.6 6.8 6.7 6.6 6.4
QC 1.2 1.5 1.5 1.6 2.6 2.7 3.3 3.8 7.6 7.2 6.9 6.6
NB 2.3 0.4 0.7 1.0 2.9 1.6 2.5 3.1 9.8 9.7 9.4 8.9
NS 1.0 1.3 1.1 1.1 2.4 2.5 2.9 3.2 8.6 8.5 8.2 7.9
PEI 1.3 0.8 0.7 1.0 3.9 2.0 2.5 3.1 10.4 11.3 11.1 10.9
N&L (2.0) 0.2 (3.8) (1.7) (11.5) (2.2) 0.2 1.8 12.8 12.9 12.6 11.9
Canada 1.1 1.2 1.7 1.9 0.5 1.6 4.2 4.4 6.9 7.0 6.9 6.7
Real GDP (Y/Y % Chg) Nominal GDP (Y/Y % Chg) Unemployment Rate (%)
CIBC Economic Forecast - Canada
GDP moving higher and unemployment grinding lower
Alberta exiting recession with every province except Newfoundland and Labrador expected to post positive
growth.
Commodity Prices Showing Some Signs Of Life – A Positive Read-through For Canada
CIBC World Markets Inc.
CONFIDENTIAL
2013 2014 2015 2016 2017F 2018F
Oil (WTI) $/bbl 98 93 49 43 53 58
Natural Gas (Henry) $/Mn Btu 3.73 4.35 2.61 2.40 2.95 2.80
Gold $/troy oz 1202 1184 1061 1250 1200 1250
Silver $/troy oz 19.50 15.70 13.80 17.60 16.90 18.10
Iron Ore (62% Fe) $/mt 136 97 56 65 58 56
Copper $/lb 3.33 3.12 2.50 2.18 2.23 2.20
Aluminum $/lb 0.84 0.85 0.76 0.74 0.71 0.68
Nickel $/lb 6.82 7.68 6.38 4.36 4.96 4.92
Zinc $/lb 0.87 0.98 0.95 0.96 1.16 1.08
Lumber $/'000 bd ft 345 338 268 298 335 350
Potash $/tonne 379 297 304 250 230 240
Commodity Price Outlook
Looking for a more stable and constructive energy market
Fiscal Stimulus – An Added Boost (We Hope) 28
Statistics Canada, Infrastructure Canada and CIBC World Markets Inc.
CONFIDENTIAL
Fiscal Stimulus
- $180 billion has been committed to infrastructure over the 12-year period to 2028.
- Investments are spread across public transit, green infrastructure, and social infrastructure.
Canadian Federal Government Infrastructure Spend (1990-2027)
Economic Outlook – U.S. Remains Healthy 29
CIBC World Markets Inc., Bloomberg
CONFIDENTIAL
(0.3%)
(2.8%)
2.5%
1.6%
2.2% 1.7%
2.4% 2.6%
1.5%
2.2% 2.1%
(4.0%)
(3.0%)
(2.0%)
(1.0%)
0.0%
1.0%
2.0%
3.0%
2008
2009
2010
2011
2012
2013
2014
2015
2016
E
2017
E
2018
E
US Real GDP Growth (Y/Y %)
5.8%
9.3% 9.6% 8.9%
8.1% 7.4%
6.2%
5.3% 4.9% 4.8% 4.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2008
2009
2010
2011
2012
2013
2014
2015
2016
E
2017
E
2018
E
US Unemployment Rate
-4
-2
0
2
4
6
8
10
1/1/
2010
4/1/
2010
7/1/
2010
10/1
/201
0
1/1/
2011
4/1/
2011
7/1/
2011
10/1
/201
1
1/1/
2012
4/1/
2012
7/1/
2012
10/1
/201
2
1/1/
2013
4/1/
2013
7/1/
2013
10/1
/201
3
1/1/
2014
4/1/
2014
7/1/
2014
10/1
/201
4
1/1/
2015
4/1/
2015
7/1/
2015
10/1
/201
5
1/1/
2016
4/1/
2016
7/1/
2016
10/1
/201
6
US Industrial Production (Y/Y %)
30
40
50
60
70
80
90
100
110
120
1/1/
2010
4/1/
2010
7/1/
2010
10/1
/201
0
1/1/
2011
4/1/
2011
7/1/
2011
10/1
/201
1
1/1/
2012
4/1/
2012
7/1/
2012
10/1
/201
2
1/1/
2013
4/1/
2013
7/1/
2013
10/1
/201
3
1/1/
2014
4/1/
2014
7/1/
2014
10/1
/201
4
1/1/
2015
4/1/
2015
7/1/
2015
10/1
/201
5
1/1/
2016
4/1/
2016
7/1/
2016
10/1
/201
6
US Consumer Confidence
U.S. Consumer – Remains A Bright Spot
Bloomberg and CIBC World Markets Inc.
CONFIDENTIAL
U.S. Consumer Indicators Remain Healthy
$300
$320
$340
$360
$380
$400
$420
$440
$460
$480
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
Jul-1
6
US
$ B
ln
U.S. Retail Sales
200
400
600
800
1000
1200
1400
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
Jul-1
6
Tho
usan
ds
U.S. Housing Starts By Month (SAAR)
8
10
12
14
16
18
20
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
Jul-1
6
Mln
s
U.S. Auto Sales (SAAR)
PMI + NMI = Constructive Outlook 31
Bloomberg
CONFIDENTIAL
US PMI And NMI Hitting Recent Highs -> A Good Sign For The Overall Economy
US PMI A Good Leading Indicator For Freight Volumes
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
45.0
47.0
49.0
51.0
53.0
55.0
57.0
59.0
61.0
63.0
65.0
Jan-
10
May
-10
Sep
-10
Jan-
11
May
-11
Sep
-11
Jan-
12
May
-12
Sep
-12
Jan-
13
May
-13
Sep
-13
Jan-
14
May
-14
Sep
-14
Jan-
15
May
-15
Sep
-15
Jan-
16
May
-16
Sep
-16
Ben
chm
ark
Jan.
199
0 =
1.0
US PMI Versus Cass Freight Shipments
US PMI Cass Freight Shipments Index
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
Jan-
00
Sep
-00
May
-01
Jan-
02
Sep
-02
May
-03
Jan-
04
Sep
-04
May
-05
Jan-
06
Sep
-06
May
-07
Jan-
08
Sep
-08
May
-09
Jan-
10
Sep
-10
May
-11
Jan-
12
Sep
-12
May
-13
Jan-
14
Sep
-14
May
-15
Jan-
16
Sep
-16
US PMI
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
Jan-
00
Sep
-00
May
-01
Jan-
02
Sep
-02
May
-03
Jan-
04
Sep
-04
May
-05
Jan-
06
Sep
-06
May
-07
Jan-
08
Sep
-08
May
-09
Jan-
10
Sep
-10
May
-11
Jan-
12
Sep
-12
May
-13
Jan-
14
Sep
-14
May
-15
Jan-
16
Sep
-16
US NMI
Manufacturing Output
Bloomberg
CONFIDENTIAL
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
Jan-
00
Sep
-00
May
-01
Jan-
02
Sep
-02
May
-03
Jan-
04
Sep
-04
May
-05
Jan-
06
Sep
-06
May
-07
Jan-
08
Sep
-08
May
-09
Jan-
10
Sep
-10
May
-11
Jan-
12
Sep
-12
May
-13
Jan-
14
Sep
-14
May
-15
Jan-
16
Sep
-16
US Industrial Production (M/M %)
65.0
67.0
69.0
71.0
73.0
75.0
77.0
79.0
81.0
83.0
85.0
Jan-
00
Sep
-00
May
-01
Jan-
02
Sep
-02
May
-03
Jan-
04
Sep
-04
May
-05
Jan-
06
Sep
-06
May
-07
Jan-
08
Sep
-08
May
-09
Jan-
10
Sep
-10
May
-11
Jan-
12
Sep
-12
May
-13
Jan-
14
Sep
-14
May
-15
Jan-
16
Sep
-16
US Capacity Utilization (%)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
Jan-
00
Sep
-00
May
-01
Jan-
02
Sep
-02
May
-03
Jan-
04
Sep
-04
May
-05
Jan-
06
Sep
-06
May
-07
Jan-
08
Sep
-08
May
-09
Jan-
10
Sep
-10
May
-11
Jan-
12
Sep
-12
May
-13
Jan-
14
Sep
-14
May
-15
Jan-
16
Sep
-16
US Industrial Production Versus Cass Freight Index(Correlation = 0.75)
US Industrial Production (M/M %) Cass Freight Index (RHS)
Inventory-To-Sales – Moving Past The Peak
US Federal Reserve
CONFIDENTIAL
1.20
1.30
1.40
1.50
1.60
1.70
1.80
Jan-
92
Dec
-92
Nov
-93
Oct
-94
Sep
-95
Aug
-96
Jul-9
7
Jun-
98
May
-99
Apr
-00
Mar
-01
Feb
-02
Jan-
03
Dec
-03
Nov
-04
Oct
-05
Sep
-06
Aug
-07
Jul-0
8
Jun-
09
May
-10
Apr
-11
Mar
-12
Feb
-13
Jan-
14
Dec
-14
Nov
-15
Oct
-16
US Retail Inventory-To-Sales Ratio
1.10
1.20
1.30
1.40
1.50
1.60
1.70
Jan-
92
Dec
-92
Nov
-93
Oct
-94
Sep
-95
Aug
-96
Jul-9
7
Jun-
98
May
-99
Apr
-00
Mar
-01
Feb
-02
Jan-
03
Dec
-03
Nov
-04
Oct
-05
Sep
-06
Aug
-07
Jul-0
8
Jun-
09
May
-10
Apr
-11
Mar
-12
Feb
-13
Jan-
14
Dec
-14
Nov
-15
Oct
-16
US Manufacturing Inventory-To-Sales Ratio
1.10
1.15
1.20
1.25
1.30
1.35
1.40
1.45
Jan-
92
Dec
-92
Nov
-93
Oct
-94
Sep
-95
Aug
-96
Jul-9
7
Jun-
98
May
-99
Apr
-00
Mar
-01
Feb
-02
Jan-
03
Dec
-03
Nov
-04
Oct
-05
Sep
-06
Aug
-07
Jul-0
8
Jun-
09
May
-10
Apr
-11
Mar
-12
Feb
-13
Jan-
14
Dec
-14
Nov
-15
Oct
-16
US Wholesale Inventory-To-Sales Ratio
Freight Volumes Stabilizing 34
AAR, ATA, Bloomberg
CONFIDENTIAL
0
50
100
150
200
250
300
350
400
1/1/
2010
4/1/
2010
7/1/
2010
10/1
/201
0
1/1/
2011
4/1/
2011
7/1/
2011
10/1
/201
1
1/1/
2012
4/1/
2012
7/1/
2012
10/1
/201
2
1/1/
2013
4/1/
2013
7/1/
2013
10/1
/201
3
1/1/
2014
4/1/
2014
7/1/
2014
10/1
/201
4
1/1/
2015
4/1/
2015
7/1/
2015
10/1
/201
5
1/1/
2016
4/1/
2016
7/1/
2016
10/1
/201
6
TransCore’s Canadian Freight Volumes Index
100
105
110
115
120
125
130
135
140
145
150
1/1/
2010
4/1/
2010
7/1/
2010
10/1
/201
0
1/1/
2011
4/1/
2011
7/1/
2011
10/1
/201
1
1/1/
2012
4/1/
2012
7/1/
2012
10/1
/201
2
1/1/
2013
4/1/
2013
7/1/
2013
10/1
/201
3
1/1/
2014
4/1/
2014
7/1/
2014
10/1
/201
4
1/1/
2015
4/1/
2015
7/1/
2015
10/1
/201
5
1/1/
2016
4/1/
2016
7/1/
2016
10/1
/201
6
ATA For Hire Truck Tonnage Index (SA)
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
01/0
1/16
02/0
1/16
03/0
1/16
04/0
1/16
05/0
1/16
06/0
1/16
07/0
1/16
08/0
1/16
09/0
1/16
10/0
1/16
11/0
1/16
12/0
1/16
Rail Carloads - Rolling 4 Week Avg - Y/Y %
Freight Rates Stabilizing
Nulogix, Cass
CONFIDENTIAL
90
95
100
105
110
115
120
125
130
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
Jul-1
6
Cass TL Linehaul Index
90
95
100
105
110
115
120
125
130
135
140
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
Jul-1
6
Cass Intermodal Index
1,000
1,050
1,100
1,150
1,200
1,250
Jan-
08A
pr-0
8Ju
l-08
Oct
-08
Jan-
09A
pr-0
9Ju
l-09
Oct
-09
Jan-
10A
pr-1
0Ju
l-10
Oct
-10
Jan-
11A
pr-1
1Ju
l-11
Oct
-11
Jan-
12A
pr-1
2Ju
l-12
Oct
-12
Jan-
13A
pr-1
3Ju
l-13
Oct
-13
Jan-
14A
pr-1
4Ju
l-14
Oct
-14
Jan-
15A
pr-1
5Ju
l-15
Oct
-15
Jan-
16A
pr-1
6Ju
l-16
Oct
-16
Canadian Freight Index - Base Freight (Ex. Fuel Surcharges)
Weaker C$ - Not The Stimulant We Thought, But Starting To Become A Tailwind 36
CIBC World Markets Inc.
CONFIDENTIAL
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
CADUSD 0.75 0.74 0.72 0.73 0.72 0.72
USDCAD 1.34 1.36 1.39 1.37 1.38 1.38
USDJPY 114 112 110 108 106 106
EURUSD 1.04 1.07 1.1 1.12 1.14 10.15
GBPUSD 1.22 1.23 1.25 1.27 1.3 1.32
AUDUSD 0.72 0.72 0.74 0.76 0.77 0.78
USDCHF 1.04 1.01 0.99 0.98 0.96 0.97
FX Forecast
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan-9
7
Nov-9
7
Sep-9
8
Jul-
99
May-0
0
Mar-
01
Jan-0
2
Nov-0
2
Sep-0
3
Jul-
04
May-0
5
Mar-
06
Jan-0
7
Nov-0
7
Sep-0
8
Jul-
09
May-1
0
Mar-
11
Jan-1
2
Nov-1
2
Sep-1
3
Jul-
14
May-1
5
Mar-
16
$ M
ln
Canada-US Merchandise Trade Balance (SA)
0
1,000
2,000
3,000
4,000
5,000
6,000
Jan-1
0
May-1
0
Sep-1
0
Jan-1
1
May-1
1
Sep-1
1
Jan-1
2
May-1
2
Sep-1
2
Jan-1
3
May-1
3
Sep-1
3
Jan-1
4
May-1
4
Sep-1
4
Jan-1
5
May-1
5
Sep-1
5
Jan-1
6
May-1
6
Sep-1
6
$ M
ln
Canada-US Merchandise Trade Balance (SA)
Uncertain Political Environment
Donald Trump’s trade platform:
- Opposes the Trans-Pacific Partnership (TPP)
- Opposes the North American Free Trade Agreement (NAFTA)
- Border tax
Implications for trade:
- Canada – hit by “friendly fire” -> while Canada is not the focus, any renegotiation of NAFTA is unlikely to be
positive
37
US Bureau of Economic Analysis
CONFIDENTIAL
Category 2014 2015
Petroleum & products 334,003 181,973
Houshould goods (including cell phones) 163,648 172,318
Computers, peripherals & semi-conductors 165,732 166,182
Passenger cars, new & used 153,362 166,122
Industrial & serv ice machinery 161,937 161,796
Parts, engines, bodies & chassis 142,910 148,011
Apparel, footw ear & household goods 135,873 142,469
Other consumer nondurables 120,472 137,438
Medicinal, dental, pharma, v itamins 91,970 108,193
Agri, food, bev erages 97,472 100,796
Chemicals 804,894 73,376
Other electrical equipment 71,586 71,715
Total Imports 2,356,366 2,248,232
Top 12 Categories Of US Imports (US$, 000)