EDMONTON, May 15, 2013 /CNW/ - Alberta's international exports are set
for steady growth over the next two years, across all sectors,
according to Export Development Canada's (EDC) Global Export Forecast.
EDC's Chief Economist, Peter Hall, was in Edmonton today to deliver his
provincial export forecast to the Canadian Manufacturing and Exporters
(CME) membership, where he predicted Alberta's exports will grow by 9
per cent in 2013 and a further 6 per cent in 2014.
"Alberta's export story over the next two years will be determined by
both the capacity to ship crude oil and pricing of natural gas.
Conditions will be helped by a dollar that's eased back from parity,"
said Mr. Hall.
The energy sector dominates Alberta's exports, accounting for
approximately 73 per cent of the province's total international sales.
Mr. Hall predicted that provincial exports of energy products will grow
by 9 per cent in 2013 and 7 per cent in 2014, on the heels of only 2
per cent growth in 2012.
"While global crude prices have stabilized, Alberta's crude has been
sharply discounted because of tight transportation capacity
constraints," Mr. Hall explained. "Earlier this year, the price gap
between WTI and Western Canadian Select crude averaged about USD
20/bbl, a wedge that adds up to about $16 billion in annual losses.
Rail capacity increases and pipeline repurposing have together boosted
shipments, and for the moment have narrowed the price gap. However,
constraints remain a threat to the industry. Even so, crude exports to
the U.S. should rise this year and next, the value of which is helped
by an easing Canadian dollar."
"Lower U.S. inventories and rising prices will lift Alberta's natural
gas export earnings at a double-digit pace this year and next,"
continued Mr. Hall. "Unfortunately, there's little incentive to
increase Canadian production as long as Henry Hub prices remain below
USD 5/mmbtu. For Alberta gas, this forecast is all about prices.
Volumes will likely decline as natural gas rigs are redeployed to more
profitable crude oil servicing."
The U.S. recovery is expected to help the machinery/equipment (M&E) and
forestry sectors, with industrial activity in the U.S. spurring M&E
sales, while a resurgent U.S. housing market will be a boon to lumber
EDC's forecast noted that other export categories will perform well this
year, but 2014 will be more of a mixed outcome. Fertilizer prices are
predicted to slip a notch, even though Alberta is expected ship more
this year. Metals and minerals will be up considerably in 2013, but
chemicals will grow at a slower rate.
Nationally, Canadian merchandise exports are forecast to rise 9 per cent
in 2013 and 5 per cent in 2014, while economic growth (GDP) is expected
to rise 2.2 per cent this year and 1.9 next year. EDC is forecasting
global growth of 3.5 per cent in 2013 and 4.2 per cent in 2014.
EDC's semi-annual Global Export Forecast addresses the latest global
export conditions including market- and sector-specific insights to
help Canadian exporting companies grow their international business and
minimize risk. It also analyzes a range of risks for which exporters
should be prepared. Read EDC's Global Export Forecast.
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 7,400 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:
Export Development Canada