(Moncton) – November 13, 2008 – Prince Edward Island's (PEI) international exports are expected to be among the country's best with 7 per cent growth in 2009 after a decline of 3 per cent in 2008, according to a provincial export outlook by Export Development Canada (EDC).
'Weaker demand in the U.S. fallout from the spike of the Canadian dollar earlier this year and weaker commodity prices are driving this year's slowdown,' said Peter Hall, Vice-President and Chief Economist. 'U.S. demand will weaken further in 2009, but a sharply lower Canadian dollar will help lift export earnings by a solid 7 per cent in 2009.'
The agrifood sector accounts for two thirds of PEI's total international exports, with the U.S. as the destination market for approximately 50 per cent of all shipments. Agrifood exports are expected to fall 5 per cent in 2008 before climbing more than 7 per cent in 2009. The value of processed food and other cash crop exports, like table potatoes, has been significantly impacted of the strong dollar. While volume shipments through the first half of 2008 were roughly unchanged in year-to-year terms, the cash value of total frozen food exports declined 17 per cent.
Seafood sales, largely comprised of lobster and mussels, saw almost no growth in the first half of 2008. While lobster landings were up, the impact of the stronger dollar offset most of the gains. As lobster, a luxury item, is more sensitive to price fluctuations, the industry is looking to diversify sales to the EU. Mussels, however, are less price-sensitive as they are more of a niche product.
Three other categories of exports accounting for a combined 21 per cent of the province's total foreign sales, are industrial goods, machinery and equipment (M&E) and transportation equipment. Aerospace has been the key driver of the transportation sector thanks to the province's aircraft and engine modernization facilities. Rail-car overhauls are also an important contributor to the transportation sector's rampant growth. While most sub-categories of M&E are performing poorly due to the US slowdown, sales of turbines and power transmission equipment are driving the surge in the sector's export earnings. Sales of industrial goods and consumer goods will continue to perform poorly given their reliance on U.S. industrial production and consumer spending.
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.
Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598 2904
BlackBerry: ptaylor@edc.ca
