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May 25, 2010

Slow recovery foreseen for Saskatchewan and Manitoba exports this year

Saskatchewan exports are forecasted to grow by a modest 1 per cent this year before being followed by a more forceful rebound of 10 per cent in 2011, according to Export Development Canada's (EDC) Provincial Export Forecast.

The sharp correction in commodity prices from peak levels has largely run its course, but there is little reason to anticipate a renewed surge," said Peter Hall, Chief Economist at EDC.

The agri-food sector accounts for 37 per cent of the province's exports, and EDC expects a 12 per cent decline in 2010 before a modest increase of 2 per cent in 2011.

Saskatchewan's energy sector accounts for 34 per cent of the province's export total, and EDC forecasts that the sector will grow by 10 per cent in 2010 before slowing to 4 per cent growth in 2011.

Manitoba's exports on the other hand 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.

"The energy sector stands to benefit from higher average prices. Exports of processed meats are on the cusp of a turnaround" said Mr. Hall. "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 agri-food 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. Crop exports will remain dampened by tight competition this year amid global surpluses, and then by lackluster prices through much of 2011.

Manufacturers of Manitoba's agricultural manufacturing and equipment are expected to see sales soften as demand remains depressed from the Commonwealth of Independent States, their key growth market.