(OTTAWA) November 27, 2007 The value of international exports from Prince Edward Island is forecast to rebound by 5 per cent in 2007 before moderating to growth of 2 per cent in 2008, according to a provincial export outlook by Export Development Canada (EDC).
"The softer outlook in 2008 is mainly due to weaker lobster and frozen potato exports, partially offset by continued strength in aerospace and pharmaceutical exports," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist.
Two thirds of the Island's exports come from the agri-food sector which, in turn, is dominated by potato and lobster exports. Frozen potato products (french fries) account for 70 per cent of the value of the Island's potato exports, or 25 per cent of the province's total exports. Frozen potato exports are expected to increase 20 per cent in 2007, benefiting from a poor 2006 potato crop in Europe and solid U.S. demand. Exports of frozen fries to the US are expected to remain on an upward trend despite a widely expected slowdown in the US economy. Looking forward, the 2007 potato crop in Europe has been good despite minor flood losses in the UK, which is expected to exert some downward price pressure in non-US markets, leading to a more modest 5 per cent increase in export growth in 2008. In the long term, PEI exporters are continuing to make inroads into emerging markets such as Saudi Arabia, China and the United Arab Emirates.
The Island's lobster fishery accounts for over 60 per cent of total fishing exports. Lobster exports are set to decline in 2007 as lobster landings were abnormally high in 2006 and cold waters in the spring of 2007 reduced early lobster landings by 10 per cent. However, east coast lobster landings in the U.S. were also down this year, leading to a tight supply-demand balance. While PEI's fresh lobster shipments are expected to remain steady, frozen lobster will see lower export levels in 2007 as European countries, with the exception of France and Norway, have significantly reduced their purchases. Nevertheless, fishing exports are expected to rise a modest 2.8 per cent in 2007, as significant increases in exports of mussels and frozen crab more than offset the decline in lobster shipments. EDC expects fishing exports to fall by 4 per cent in 2008 based on a less favourable pricing environment and sluggish U.S. consumer spending.
Nationally, Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007, and 2.6 per cent in 2008. Key price gains in commodities have put Canadian exports on track to increase by 3.7 per cent in 2007, but the impact of weaker U.S. and global demand will have the export growth rate more than halved to 1.5 per cent in 2008. Internationally, EDC is forecasting a 4.9 per cent growth rate in 2007, and 4.5 per cent 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 6,400 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 recognized as one of Canada's Top 100 Employers for seven consecutive years.
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Media contact: Phil TaylorEDC Public Affairs(613) 598-2904ptaylor@edc.ca
