TORONTO, Oct. 28 /CNW Telbec/ - Canadian export growth will decline
further through 2009 with a recovery unlikely before mid 2010, according to a
Global Export Forecast released today by Export Development Canada (EDC).
"A quick rebound to the global slowdown is clearly not on. The
considerable excesses of the boom years, including lending, housing and
commodities, will take considerable time to work off," said Peter Hall, Chief
Economist at EDC. "The global financial story that is dominating headlines
everywhere began with the US housing market, which will remain underwater
given the millions of excess units on the market. When that inventory is
worked through, a recovery may have the chance to develop, but we don't expect
that to happen until 2010, at the earliest."
Canada's exports are being hit hard by this situation. When large
commodity price movements are removed, the real volume of exports is down an
estimated 5 per cent in 2008. However, price gains were significant enough
during the year that the dollar value of exports will actually rise by 1 per
cent. Lower commodity prices are expected to remove this effect in 2009, when
exports are projected to post no growth. Exporters will benefit from a lower
Canadian dollar, which is forecast to stabilize in the mid-80 cent range
Canadian overall economic performance will remain lackluster, consistent
with the weaker performance of advanced economies in general. Canadian growth
will rise by a slim 0.9 per cent in 2008 and a projected 1.4 per cent in 2009.
The world economy is expected to slow from a pace of 3.8 per cent in 2008 to a
near-recessionary 3.3 per cent in 2009. Weakness will also be felt in emerging
markets as they slow from 6.8 per cent in 2008 to just 6.0 per cent in 2009, a
long way from the 7.6 per cent pace of 2004-2007.
'Normally growth this weak would further pummel Canadian exports, but
good timing and key industry developments will keep overall activity close to
2008 levels,' continued Mr. Hall. In spite of large price declines, volume
shipments of energy products will see moderate increases, which will help
stabilize the overall export picture. EDC expects crude oil to average USD
75/bbl for 2009, marking a 26 per cent decline from this year's projected
average of USD 102/bbl as speculators beat a hasty retreat. Solid global
demand for agrifood products and fertilizer will keep these important Canadian
sectors growing. The aerospace sector is forecast to increase shipments as
Canada's product mix is in high demand. New product lines will keep the
beleaguered auto sector afloat through 2009.
Gross Domestic Product (GDP) growth for the U.S. will slow to 1.7 per
cent in 2008 and decelerate further to 1.0 per cent in 2009. While decline may
have been averted in the first half of 2008, a struggling consumer, an
apprehensive investment climate and floundering manufacturing activity will
mean falling U.S. imports for a second consecutive year in 2009. With the
fortunes of Canadian exporters inextricably linked to the U.S. market, EDC
expects the value of Canadian exports to the U.S. to fall for a fourth
Faced with inflation pressures, high exchange and interest rates earlier
this year, correcting housing markets, and weak consumer and business
confidence, the Eurozone's GDP growth continues to falter. EDC's downwardly
revised outlook forecasts growth of only 1.0 per cent in 2009 after 1.5 per
cent growth in 2008. EDC predicts that by late 2009, as inflation moderates
and interest rates continue to fall, growth will begin to recover. However, if
other markets like Russia, China or India stumble by more than expected, the
slowdown could require more time to play out.
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. The Forecast
is available on EDC's website 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.
For further information:
For further information: Media contacts: Phil Taylor, Export Development
Canada, (613) 598 2904, BlackBerry: email@example.com