EDMONTON—Alberta’s international exports in all sectors are set for steady growth over the next two years on the back of strong energy production and a weak Canadian dollar, according to a new forecast.
In Edmonton to deliver a provincial export forecast, Export Development Canada (EDC) chief economist Peter Hall predicted Alberta’s exports will surge by nine per cent in 2013 and another six 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,” Hall said in his forecast to Canadian Manufacturing and Exporters (CME) members.
The energy sector dominates Alberta’s exports, accounting for approximately 73 per cent of the province’s total international sales
Hall predicted that provincial exports of energy products alone will grow by nine per cent this year, followed by another seven per cent in 2014.
Those numbers will come, he said, after the energy sector experienced growth of only two per cent in 2012.
“While global crude prices have stabilized, Alberta’s crude has been sharply discounted because of tight transportation capacity constraints,” Hall said.
According to Hall, the price gap between West Texas Intermediate and Western Canadian Select crude earlier in 2013 averaged around $20 per barrel, which adds up to about $16-billion in annual losses.
While a combination of increased rail capacity and Canadian pipeline repurposing has boosted shipments and arrowed the price gap, Hall said capacity constraint still pose a threat to the sector.
In other areas, the continued economic recovery in the United States is expected to help the machinery/equipment and forestry sectors, with industrial activity in the U.S. spurring equipment sales and a resurgent U.S. housing market boosting lumber exports.
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 nine per cent in 2013 and five 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.