(CALGARY) – November 24, 2008 – Alberta's international exports are expected to decline by 8 per cent in 2009 following torrid 24 per cent growth in 2008, according to a provincial export outlook by Export Development Canada (EDC).
'Falling energy and chemicals exports will lead to a decline of 8 per cent in 2009, the first overall decline since 2002,' said Peter Hall, Vice-President and Chief Economist. 'The outlook for the agrifood sector is robust, but largely price-driven, while forestry's deceptively strong gain is linked to a falling Canadian dollar.'
The energy sector accounts for 69 per cent of Alberta's total international exports. Crude exports surged in 2008 on higher oil prices and increased shipments of synthetic crude. In 2009, rising output from the oilsands will be undermined by plunging oil prices, which EDC expects to average USD 75/barrel in 2009. Natural gas exports are also expected to fall, as both prices and volumes decline. Overall, Alberta's energy sector is expected to decline by 12 per cent in 2009 following a 32 per cent gain this year.
Exports of industrial goods, largely chemicals and fertilizers, make up 13 per cent of the province's exports. Chemical exports are forecast to fall in 2009, as US industrial and consumer demand weakens. What is more, lower feedstock costs and sizable new chemicals production capacity in emerging markets will drive prices lower. Fertilizers, a key segment of the industrial goods sector, will post another strong year of sales in 2009 due to strong global demand conditions.
The agrifood sector, which accounts for 8 per cent of Alberta's exports, is expected to rise 9 per cent in 2009, on top of an 18 per cent gain this year. Strong biofuel demand and low global inventories will continue to support wheat and oilseed prices. Exports of live animals and meat products will rise, but only on higher prices, and largely because of elevated feed costs. However, higher costs and soft US demand means profit margins will be squeezed.
Canadian exports are forecast to grow by 2 per cent in 2008 before declining 1 per cent in 2009. The Canadian economy is expected to grow by 0.9 per cent in 2008 with a slight upturn to 1.4 per cent in 2009. Internationally, EDC is forecasting a 3.8 per cent growth rate in 2008 and 3.3 per cent 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 nearly 7,000 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, is a recognized leader in financial reporting and economic analysis, and has been named one of Canada's Top 100 Employers for eight consecutive years.
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Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598 2904
BlackBerry: ptaylor@edc.ca
