CALGARY, Alta.–The revival of the US economy and a lower Canadian dollar are helping to propel oil export volumes in 2015, offsetting the impact on exports of sharply lower oil prices, according to a new report from Export Development Canada (EDC).
Fortunately, other export industries are also helping to shore up 2015 growth. For example, exports of industrial machinery are predicted to be the province’s highest growth sector in 2015 at 16 per cent.
“Oil is always a key driver in Alberta. As it absorbs the impact of huge price shifts, it is encouraging to see growth in other sectors taking the lead,” says Peter Hall, Chief Economist, EDC. “Impressive progress this year in oil and gas and the agri-food sectors will wane in 2015, giving way to solid acceleration in the industrial machinery and forestry sectors.” Overall, EDC’s new outlook calls for Alberta exports to increase by 17 per cent in 2014 and 5 per cent in 2015.
“Currently 88 per cent of Alberta exports are US bound,” says Hall. “A lower Canadian dollar will help encourage competition for Canadian crude oil and natural gas in 2015. Potential pipelines could also help improve the supply chain for this industry. However, the industry will continue to face challenges in transportation capacity.” Energy exports account for 75 per cent of Alberta’s total exports, with 98 per cent of that directed to the US.
“The expansion we’re seeing in the US housing market supports the potential for further opportunities for Alberta construction, forestry and transportation businesses,” says Hall. “Positive movement in these sectors will help support job creation, particularly among small businesses, and will help to diversify Alberta’s export portfolio.”
Alberta’s agriculture and food exports also saw big increases this year with demand from emerging markets, driving it to 19 per cent growth. Russian sanctions and instability in Eastern Europe affected Alberta beef and grain exports considerably, but at the same time demand increased in emerging markets. “Increased income overall has allowed consumers in emerging economies to have more choice, and they’re looking to Canada to receive quality goods,” says Hall.