(WINNIPEG) – Thursday, May 20, 2010 -- Manitoba's exports are forecast to grow by 4 per cent in 2010 and 7 per cent in 2011, a modest recovery compared with the plunge in 2009, according to a Provincial Export Forecast released today by Export Development Canada (EDC).
"The forecast by industry is as varied as Manitoba's economy is diversified," said Peter Hall, Chief Economist, EDC, during a speech in Winnipeg.
"The energy sector stands to benefit from higher average prices. Exports of processed meats are on the cusp of a turnaround. . Shipments of transportation equipment will remain cushioned by industry-specific factors. In contrast, agricultural machinery and equipment exports have yet to contend with the legacies of the global crisis."
"It should be noted that several sectors have sustained more persistent output losses, so a return of the province's overall exports to pre-crisis levels will take time."
The agrifood sector accounts for 39 per cent of Manitoba's exports, and EDC is forecasting a decline of 6 per cent in 2010 before rebounding in 2011 with 5 per cent growth. EDC expects that livestock exports will continue to be weighed down in 2010 by the trade-distortive effects of the U.S. country-of-origin labeling (COOL) regulations. Manitoba's hog inventory dynamics, farrowing intentions, and the extent of industry exit will all be affected by these regulations and further export declines can be expected.
Crop exports will remain dampened by tight competition this year amid global surpluses, and then by lackluster prices through much of 2011. Marketing the province's record 2009/2010 canola crop just as China fully shuts its door to imports with traces of blackleg disease will also be have a potentially negative effect on exports.
Manufacturers of agricultural manufacturing and equipment (M&E) are expected to see sales soften as demand remains depressed from the Commonwealth of Independent States, their key growth market. However, EDC's forecast noted a few positive developments:
- The strength in the U.S. should offer an offset to weak M&E exports to emerging Europe;
- The federal government's concerted efforts to restore access to China's canola crushing facilities are likely to accelerate resolution; and
- While Manitoba's livestock herd continues to decline, the rate of contraction is falling.
"Going a little deeper into 2011, we can see positive signs like a forecast increase in meat prices, the reopening of China and Russia to US pork, and Canada's WTO challenge of COOL, all of which could offer a lift to export prospects," said Mr. Hall.
Canadian exports are forecast to rise 11 per cent in 2010 and 7.6 per cent in 2011. Nationally, economic growth is expected to rise 2.5 per cent in 2010 and 2.9 per cent in 2011. Internationally, EDC is forecasting global growth of 3.7 per cent in 2010 and 4.2 per cent in 2011. EDC's Global Export Forecast is available 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 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, and has been recognized as one of Canada's Top 100 Employers for nine consecutive years.
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Media contacts:
Phil Taylor
Export Development Canada
Tel: (613) 598-2904
Blackberry: ptaylor@edc.ca
