Alberta exports to grow in spite of flatter crude shipments, says Export Development Canada

CALGARY, AB, Nov. 16, 2011 /CNW/ - Alberta's international exports are forecast to grow by another 2 per cent in 2012 following 2011's estimated 18 per cent surge, according to a Global Export Forecast by Export Development Canada (EDC).

"While Alberta counts on crude oil and natural gas for the bulk of its exports, other industries will generate all of the growth in international sales during 2012," said Peter Hall, Chief Economist for EDC. "Next year, the province's export growth will be buoyed by the forestry and industrial goods sectors as declining prices put downward pressure on Alberta's oil exports."

Hall was in Calgary today to share his forecast with EDC customers, the fifth stop on a 10-city cross-Canada tour.

The province's international export picture is led by three key sectors:

  • Energy, accounting for 72 per cent of the province's total exports;
  • Industrial Goods, accounting for 11 per cent; and
  • Agri-food, accounting for 8.4 per cent.

"After a hefty 21 per cent increase in energy exports in 2011, performance will plateau 2012 as slight gains in natural gas and electricity offset price declines for oil and coal." A critical element of this forecast is EDC's outlook for world oil prices, with the cost of WTI crude expected to fall from an average of USD 94/bbl in 2011 to USD 85/bbl in 2012.

"High inventories and weak market conditions suggested that the triple-digit crude prices seen earlier this year were unsustainable," Mr. Hall added. "The sharp slowing of the global economy during the summer and speculation about a double-dip recession burst the price bubble by mid-year. Current demand and supply conditions suggest that there's little fundamental support for a price rebound, so we believe lower prices are in the offing through 2012."

"We expect growth in U.S. natural gas production to slow through 2012, leading to a gradual reduction of inventories and modest increases in the price of gas this year and next.  We expect gas at Henry Hub to average USD 4.25/MMBtu in 2011, and drift upwards to USD 4.75/MMBtu in 2012, with some upward price pressure coming from the expected decline in U.S. drilling activity."

EDC's agri-food sector forecast calls for record-high prices for agricultural commodities that will push exports up by 6 per cent next year, following a 17 per cent jump in 2011. "Growth in biofuel usage, coupled with the trend in emerging markets towards higher protein diets, continues to drive global demand for grains, oilseeds, meats and live cattle."

EDC believes that the province's forestry exports will rise 4 per cent this year and 18 per cent in 2012. "Wood products will see strong growth thanks to the beginnings of a resurgence in the U.S. housing market," said Hall. "In addition, strong Chinese demand for lumber and a boost from new production at Fox Creek will boost the numbers."

EDC's forecast for the province's industrial goods sector expects gains of 11 per cent in 2011 and 9 per cent in 2012.

Canadian exports of goods and services are forecast to rise 11 per cent in 2011 and 7 per cent in 2012. Nationally, economic growth is expected to rise 2.3 per cent in 2011 and 2.4 per cent in 2012. EDC is forecasting global growth of 3.7 per cent in 2011 and 4.3 per cent in 2012.

EDC's semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

B-Roll footage of Peter Hall's forecast comments available at: http://Exportwise.ca/listvideo_en.

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 8,200 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.

SOURCE Export Development Canada

For further information:

Media contacts:
Phil Taylor
Export Development Canada
Tel: 613.598.2904
BlackBerry: ptaylor@edc.ca


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