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
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.