OTTAWA, May 4 /CNW Telbec/ - Alberta's exports are expected to drop 35
per cent in 2009 before rising by 13 per cent in 2010, according to a
provincial export outlook by Export Development Canada (EDC).
"All five of Alberta's major export categories are expected to drop, and
energy will lead the way with lower prices for crude and natural gas," said
Peter Hall, Chief Economist of EDC.
"Energy prices will regain some lost ground next year, lifting the
province's total exports by 13 per cent. While this is expected to be the
second best performance among the provinces, it still leaves the province's
total exports overall almost 26 per cent below the boom times of 2008."
Alberta's export picture is dominated by the energy sector, which
accounts for 74 per cent of the province's overall exports. EDC expects crude
and petroleum product exports to plunge 40 per cent in 2009, as the price of
crude falls from an average USD100/brl in 2008 to USD47/brl in 2009.
The startup of CNRL's Horizon project and Opti/Nexen's Long Lake project
will lift export volumes in 2009, which more than offsets falling conventional
crude production and the retreat from investment as a result of the global
economic slowdown. EDC forecasts that export volumes will rise again in 2010.
Adding to next year's export story is an expected increase in crude prices to
USD 55/brl, according to EDC's energy sector forecast.
Plunging demand and rising supply in the U.S. has led to a surge in
underground natural gas storage inventories. Companies like Encana, Shell and
Connoco-Phillips have all cut their gas spending plans as a result. EDC's
natural gas export forecast is for a decline of 40 per cent this year and
growth of 15 per cent in 2010.
Alberta's Industrial goods exports, which account for 11 per cent of the
province's total exports, will largely follow EDC's outlook for the province's
chemicals industry, which is dominated by petrochemicals.
While the benefits of a lower Canadian dollar and reduced feedstock costs
will help margins, the sector's financial, export and output prospects all
remain negative. The industry is highly cyclical and the downswing of this
cycle is expected to be much worse than normal. After dropping an estimated 20
per cent in 2009, EDC forcasts that chemical exports will rise by 8 per cent
in 2010 as U.S. demand slowly recovers.
EDC forecasts a 15 per cent decline of agrifood exports in 2009. Prices
for key grains like wheat and oilseeds, which account for 60 per cent of the
sector's exports, have dropped in a similar fashion to most other commodities.
This price weakness will offset potentail higher shipment volumes in 2009.
Meat exports will also struggle from the effects of faltering U.S.
demand. EDC's forecast of a 5 per cent increase in agrifood exports in 2010
will not be of little consolation to exporters after the 2009 decline.
Canadian exports are forecast to decline by 22 per cent in 2009 before
rebounding by 7 per cent in 2010. Nationally, economic growth is expected to
decline by 2 per cent in 2009 with a slight increase of 1.7 per cent in 2010.
Internationally, EDC is forecasting a 1.3 per cent decline in 2009 and 2.3 per
cent increase in 2010 in global GDP. EDC's Global Export Forecast is available
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 8,300
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 eight consecutive years.
For further information:
For further information: Phil Taylor, Export Development Canada, (613)
598-2904, Blackberry: firstname.lastname@example.org