EXPORT TRADE SPECIAL: Alberta energy exports will be outpaced this year

There will little growth overall in Alberta exports this year due primarily to declining energy prices and volumes but several sectors will see substantial increases, according to a provincial export outlook from Export Development Canada (EDC).

“As Alberta is heavily dependent on one sector, its export picture changes dramatically depending on how well the energy industry performs,” says EDC senior vice-president and chief economist Stephen Poloz. “This year will see a reverse in the province’s overall export performance as both petroleum prices and natural gas volumes are on tap to decrease, despite a fairly good export growth forecast for the other sectors.”

Alberta’s energy exports are expected to decline by four per cent in 2004, the cornerstone of the province’s overall export forecast, after surging almost 32 per cent last year. Price and volume declines for petroleum and natural gas exports are behind the significant change in this year’s industry projections.

Other highlights include:

Industrial goods exports are expected to grow by 11 per cent this year and a further four per cent next year due to a favourable pricing environment for commodities coupled with improving industrial demand from the U.S.
The agri-food sector is expected to see a sharp rise in export sales of 18 percent this year as a result of improved growing conditions and buoyant foreign demand. Machinery and equipment export sales will rise three per cent this year and another four per cent in 2005 due to improving U.S. growth forecasts, which will help lift machinery sales.Exports in Alberta rose by 16.5 per cent in 2003 to $56.7 billion, and are expected to remain unchanged in 2004 and decline to $53.3 billion in 2005. Energy sales are the largest export sector, accounting for 71 per cent or $40 billion, followed by industrial goods at 8.9 per cent or $5 billion and agri-food goods at almost 7.3 per cent or $4 billion.Nationally, the economy is expected to grow by about three per cent in 2004 and by 3.3 per cent in 2005. Export sales should increase by six per cent this year and by two per cent next year.Mr. Poloz outlined his forecast during EDC’s Let’s Talk Exports Forum in Edmonton presented in partnership with the Edmonton Chamber of Commerce. A copy of EDC’s semi-annual global export forecast is available on EDC’s web site (http://www.edc.ca/docs/ereports/gef/EFindex_e.htm ). EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets.