Manitoba's exports set for muted recovery in 2011, says EDC

OTTAWA, Nov. 11 /CNW/ - Manitoba's export recession continued into 2010, thanks to a modest 2 per cent decline in international shipments. Growth is forecast to return in 2011, as exports see moderate growth of 6 per cent, according to a provincial forecast by Export Development Canada (EDC).

Manitoba's exports declined by 18 per cent in 2009.

"The outlook by industry varies a great deal, a testament to the diversity of Manitoba's exports," said Peter Hall, Chief Economist, EDC. "This year, we have everything from a 26 per cent decline to a 12 per cent gain, depending on the sector. All sectors are forecast to post growth next year, although the rates will still vary by industry."

"On the positive side, price increases are expected to spur growth of meat and energy-sector exports. Unfortunately, agricultural machinery and equipment has yet to recover from the punishing impacts of the global downturn; a return of the province's overall exports to pre-crisis levels will take time. Pressure from the strong Canadian dollar remains a significant challenge for Manitoba exporters."

The agri-food sector accounts for 39 per cent of Manitoba's exports, and is forecast to decline by 8 per cent this year before rebounding by 5 per cent in 2011.

"With global crop supplies more well-balanced in 2010, EDC sees little justification for rising prices this year, aside from speculation," Mr. Hall said. "We expect prices to firm somewhat in 2011 as supplies tighten somewhat, with upside potential arising from a possible increase in the U.S. biofuel blending rate. Even so, we expect prices to remain volatile given current market uncertainty."

EDC's forecast noted that livestock exports will continue to be weighed down in 2010 by the negative effects of U.S. COOL (Country of Origin Labeling) regulations. Manitoba's hog exports are expected to decline as herd sizes are reduced. However the forecast increase in meat prices offers a lift to export prospects further into the forecast horizon.

The industrial goods sector accounts for 22 per cent of the province's exports, and is expected to grow by 12 per cent this year and 6 per cent in 2011.

"The industrial goods sector is a mixed but positive outlook for Manitoba metals exports," Mr. Hall said. "Rising copper and nickel prices will bring a welcome boost to export earnings, but mine closures will reduce shipments next year."

Canadian exports are forecast to rise 12 per cent in 2010 and 6 per cent in 2011. Nationally, economic growth is expected to rise 3 per cent in 2010 and 2.2 per cent in 2011. Internationally, EDC is forecasting global growth of 4.3 per cent in 2010 and 3.9 per cent in 2011. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

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 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.

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Phil Taylor   
Export Development Canada
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