(CALGARY) May 7, 2007 Alberta's international exports are forecast to slow significantly after years of sizzling growth between 2002 and 2005. The province's exports are forecast to grow by a moderate 1 per cent in 2007 and 2 per cent in 2008, according to a provincial export outlook by Export Development Canada (EDC).
"After three outstanding years, Alberta's export growth has begun to settle back to moderate levels as the energy sector cools off amid price weakening," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "With 88 per cent of Alberta's total exports dependent on shipments to the U.S., the province is vulnerable to the health of the U.S. economy. Accordingly, we expect much slower exports across most sectors, with the exception of agri-foods." The energy sector accounts for 71 per cent of Alberta's export value and is forecast to moderate at 1 per cent growth in both 2007 and 2008. Weaker oil prices are expected over the next 2 to 3 years, as global economic growth pulls back, crude inventories are rebuilt, and increased global production capacity reduces the risk premium associated with unexpected supply shocks. While price volatility will remain, EDC forecasts an average of USD55/bbl for 2007 and USD50/bbl in 2008, after an average of USD66/bbl in 2006.
After falling by more than 20 per cent in 2006, the spot price for natural gas on the Henry Hub (HH) is poised to rebound slightly in 2007 and 2008. EDC expects a tighter supply scenario to help boost prices to USD 7.00/mmbtu in 2007 and USD 7.20/mmbtu in 2008. While volume shipments are expected to remain flat in 2007, EDC forecasts export growth of 6 per cent in 2007 and 5 per cent in 2008 as a result of higher prices and the slightly weaker Canadian dollar.
The industrial goods sector accounts for nearly 12 per cent of Alberta's total exports, and are expected to climb by 1 per cent in 2007 and 2008. After advancing a healthy 9 per cent in 2006, agri-food exports should see continued gains of 11 per cent and 3 per cent in 2007 and 2008, respectively. The agri-foods sector accounts for 7 per cent of the province's total exports.
Nationally, Canadian export volumes are forecast to decline by 1 per cent in 2007 before rising by a modest 1 per cent in 2008. Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007 and 2.9 per cent in 2008. Internationally, EDC is forecasting 4.5 per cent global economic growth in 2007 and 4.6 per cent growth in 2008. EDC's Global Export Forecast is available at http://www.edc.ca/gef.
EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by 7,000 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and is a recognized leader in financial reporting, economic analysis and has been named one of Canada's Top 100 Employers for six consecutive years.
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Media contact: Phil Taylor Public Affairs, Export Development Canada Phone: (613) 291-1276 E-mail: ptaylor@edc.ca
