Yes, of course. I would call the member's attention to a background paper which we published on our website last week. It's a four- or five-page piece which summarizes this, so I'll attempt to bring out the highlights for you now.
The methodology is not very complex. It's that in our macro models we use to model the entire economy, exports are modelled as a single category or in resources and non-resources. There are still quite a lot of things that are inside the non-resource bucket.
What we've observed over the last 18 months to two years is a growing wedge between the fundamental drivers of our non-resource exports and how many exports were actually selling. Right now, we're at about $35 billion to $40 billion fewer exports than our models would have predicted at this time.
Looking beneath this into the 31 subsectors, we're able to find a number of sectors, approximately half, which in fact have tracked their drivers quite well. That means the error term that we're concerned about is more restrictive to a smaller group, although it is still about half of our exports.
One of the ones you've mentioned is the passenger cars and light trucks. It has in fact matched reasonably well with growth and demand in the United States, not too surprisingly given the integration of the North American auto market. However, it has not historically been sensitive to exchange rate movements and as well, what we know is that the new investments that have gone into that sector in the last two or three years have primarily been outside of Canada. We reach from that the conclusion that although that sector is doing all right at this stage, we are not expecting it to contribute to a major closure of this gap that we've seen emerging.
The sectors that we believe are going to lead the way are mostly tied to U.S. investment activity, which has been relatively quiet given the stage we're at in the cycle. The U.S. recovery has been primarily driven by consumer demand and a rebound in the housing sector. Companies have not really started in full bore to invest in behind that.
We believe, in fact we stated this belief about six months ago, that as the U.S. recovery broadened into the rest of its sectors including investment and government spending—not surprisingly, state and local governments have been very tight budget-wise for some time—those constraints are easing up and so you're getting almost all cylinders beginning to fire. As that happens, we will see a stronger export recovery in Canada for many of the sectors that have lagged.