(Calgary) – May 17, 2010 -- Alberta is forecast to have the second strongest export rebound among the provinces in 2010, growing by an expected 16 per cent, according to the Provincial Export Forecast released today during a keynote presentation by Export Development Canada in Calgary.
“A reversal of fortunes in the energy sector will lead the charge in export growth this year,” said Peter Hall, EDC’s Chief Economist. “Following a punishing 42% decline last year, energy exports are forecast to rise 21% in 2010. Overall, however, export levels still remain well-below previous peaks, with exports of agri-food and drilling equipment remaining depressed in 2010.”
EDC provincial forecast also noted that export growth will rise by a further 7 per cent in 2011.
The energy sector accounts for 68.3 per cent of the province’s export total. A key sub-sector, crude and petroleum products, is forecast to grow by 18 per cent this year and 9 per cent next year.
“EDC’s growth forecast is largely driven by price expectations,” said Mr. Hall. “The forecast calls for crude prices to rise 13% this year over the 2009 average, and for gas prices to average 42% above 2009 levels. Export volumes should also climb with increased oil sands output offsetting other drops in conventional crude production. While a number of oil sands projects were delayed or shelved during the crisis, investment should resume as prices continue to climb.”
“Though the North American production outlook remains cloudy, falling continental supply and higher demand from industrial users should slowly erode excess natural gas inventories. The comparatively high production costs facing the Western Canadian Sedimentary Basin will likely lead to falling export volumes through 2011.”
The industrial goods sector accounts for 11 per cent of Alberta’s exports, and EDC forecasts that the sector will grow by 17 per cent in 2010 and a further 7 per cent in 2011. The petrochemicals industry represents the majority of Alberta’s industrial goods exports, where recovering US industrial activity will drive demand for ethylene and its derivatives through 2011, raising prices. While higher feedstock costs are forecast to contribute to upward price pressures, the increase will be mitigated by a significant expansion in global capacity.
“The new supply coming online is concentrated in the Middle-East, and will likely prompt closures in European and US Gulf capacity, but Alberta producers will remain competitive”, Mr. Hall said.
Canadian exports are forecast to rise 11 per cent in 2010 and 7 6 per cent in 2011. Nationally, economic growth is expected to rise 2.5 per cent in 2010 and 2.9 per cent in 2011. Internationally, EDC is forecasting global growth of 3.7 per cent in 2010 and 4.2 per cent in 2011. 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 more than 8,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been recognized as one of Canada’s Top 100 Employers for nine consecutive years.
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Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598-2904
Blackberry: ptaylor@edc.ca
