CHARLOTTETOWN – May 28, 2008 – Prince Edward Island's (PEI) exports are expected to register a slight decline in 2008 and modest growth of 2.6 per cent in 2009, according to a Provincial Export Forecast released today by Export Development Canada (EDC).
"Though the island's aerospace sector will do well again in 2008, we are forecasting another sub-par performance in total exports, as the province's exposure to economic slowdowns in Japan, Europe and, more importantly, the U.S., takes its toll," said Peter Hall, Vice-President of Economics and Deputy Chief Economist. "Together these markets account for 85 per cent of total exports. After flat export growth this year, we expect a gradual improvement in 2009 as a result of the weaker loonie and a modest strengthening of foreign demand."
Agrifood is by far Prince Edwards Island's top export sector, accounting for 66 per cent of the total, half of which destined for the U.S. Exports are expected to rise by a modest 1 per cent in 2008 before an improving demand outlook and a weaker currency boost sales by 3 per cent in 2009. Exports of prepared foods and beverages, which account for roughly 30 per cent of the province's international receipts, will register only modest growth in 2008. While U.S. consumer weakness portends limited demand growth, the bulk of PEI's french fry sales go to fast-food restaurant chains, which should prove less vulnerable to a weary consumer than higher-end restaurants. With potato acreage cut back in favour of wheat and other crops, EDC expects earnings tied to other soft commodities to increase at the expense of the latter.
Seafood, the sector's other major sub-category, accounts for approximately a quarter of total exports. Unlike potatoes, lobster is a luxury item and, as such, vulnerable to U.S. consumer sluggishness. EDC's U.S. outlook expects weaker foreign sales of seafood this year, with risks weighted to the downside before a projected rebound in 2009.
The three other sectors, which account for a combined 21 per cent of PEI exports, are industrial goods, machinery & equipment, and transportation equipment. Each major sector carries an equal weight. Aerospace has been the key driver of the transportation sector, with important engine overhaul facilities located in Summerside. While a general global slowdown in the industrial markets will dampen demand, we still anticipate a solid performance going forward, as rebuilds for turbo-props tend to be a more cost-effective method of keeping planes in the air. On the other hand, pharmaceuticals and M&E continue to be hit by the US slowdown this year.
Canadian exports are forecast to decline by 2 per cent in 2008 before posting 2 per cent growth in 2009. Nationally, economic growth is forecast to decline to 1 per cent in 2008 with a slight upturn to 2.3 per cent in 2009. Internationally, EDC is forecasting a 3.8 per cent growth rate in 2008 and 2009. 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 seven consecutive years.
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B-roll of Peter Hall's thoughts on PEI's exports and the forecast for the agrifood sector are available at the FTP site provided below. Additional b-roll for forecasts of the Canadian dollar, the Canadian economy, price of oil and other related topics are also available.
FTP site: ftp://relay1.edc.ca
Password: gef2008
The preview folder is for quick viewing. Please use the download folder for higher grade files suitable for television and radio broadcast use.
Media contact:
Phil Taylor
Export Development Canada
Tel: (613) 598-2904
Blackberry: ptaylor@edc.ca
