P.E.I. ex­ports strong amid down­turn, says EDC study

Ex­port De­vel­op­ment Canada says growth will slow, but it’s a nom­i­nal drop com­pared to other prov­inces

The Guardian (Charlottetown) - - Business - BY TERESAWRIGHT

Prince Ed­ward Is­land is ex­pected to weather a down­turn in ex­port mar­kets at a steady rate in con­trast to steep de­clines in the rest of the coun­try, ac­cord­ing to Ex­port De­vel­op­ment Canada.

A pro­vin­cial out­look study com­pleted by the EDC com­pared the Is­land’s ex­port des­ti­na­tions and com­pet­i­tive­ness against those of other ju­ris­dic­tions and looked at the pro­jected buy­ing trends for P.E.I.’s ex­ported goods.

P.E.I.’s ex­port growth will slow to three per cent in 2010, down from four per cent this year. But this is a nom­i­nal drop com­pared to a 23 per cent de­cline in ag­gre­gate ex­ports across the coun­try.

“I must say, in the con­text of ev­ery­thing that’s hap­pen­ing, not just glob­ally, but across Canada, this is stel­lar per­for­mance,” said Peter Hall, EDC’s chief econ­o­mist.

“Just main­tain­ing a sta­tus quo level of ac­tiv­ity is bril­liant per­for­mance all things con­sid­ered.”

The West­ern world’s spending binge of 2003 to 2007 has re­coiled due to the re­ces­sion and peo­ple are just not spending as much money. This has weak­ened de­mand for prod­ucts around the world.

“ There’s hardly any­where in the world that hasn’t been af­fected by this (down­turn) this year but when you look at P.E.I.’s ag­gre­gate num­bers, it just doesn’t show up on the bot­tom line.”

That’s be­cause de­spite down­turns in sales across the world, some mar­kets re­main strong and are pro­jected for growth. Luck­ily, P.E.I.’s ex­ports are in some of those more pos­i­tive mar­kets.

Aero­space, bio­sciences, in­for­ma­tion tech­nol­ogy and re­new­able en­ergy re­main key growth sec­tors for the Is­land. Th­ese more ad­vanced knowl­edge-based in­dus­tries have posted im­pres­sive growth over the past few years. Also gains in the ma­ture agri-food sec­tor have re­mained fairly sta­ble.

Hall said P.E.I.’s mix of th­ese agri-food ex­ports to­gether with those in niche ma­chin­ery and equip­ment and trans­porta­tion sec­tors has po­si­tioned the prov­ince to sus­tain the global slump in sales.

“ When the world econ­omy is un­der duress, peo­ple tend to change the way that they do things — they tend to con­sume more sta­ple prod­ucts and P.E.I., be­ing one of the world’s prime pro­duc­ers of all things pota­toes, is at a real ad­van­tage when it comes to that,” Hall said.

“But the mix of in­dus­tries seems to be go­ing in the Is­land’s favour. The aero­space sec­tor, for ex­am­ple, is cap­i­tal­iz­ing on a stretched in­dus­try — an in­dus­try that would pre­fer to re­pair and re­fur­bish its equip­ment as op­posed to pur­chas­ing new equip­ment — so the re­pair and re­fur­bish­ment in­dus­try, which is well rep­re­sented in P.E.I., is do­ing very well.”

Hall said fur­ther di­ver­si­fi­ca­tion and in­vest­ment in emerg­ing mar­kets such as China and In­dia could help the prov­ince ac­tu­ally grow its ex­ports.

“ There’s a big trans­for­ma­tion go­ing on in the dis­tri­bu­tion of global de­mand and any­body who is not think­ing of di­ver­si­fy­ing ei­ther sales or pro­duc­tion into emerg­ing mar­kets in the rest of the world — many of which are sport­ing ag­gres­sive growth even in the down­turn pe­riod — we’re vul­ner­a­ble to those tra­di­tional mar­kets and those tra­di­tional mar­kets just don’t have a bright long-term fu­ture.”

EDC, Canada’s ex­port credit agency, is a rec­og­nized leader in fi­nan­cial re­port­ing and eco­nomic anal­y­sis.

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