Go south, go west, go everywhere
It’s a mantra that businesses hear all the time. They’re told by governments, by economic developers, by their peers, by just about everyone, to seek out international markets. Success beyond our borders will allow the business to grow, they’re told, and will shield it from the vagaries of Alberta’s oil-and-gas driven economy.
Ben Arber, head of global trade at HSBC, agrees. “There’s no danger of the oil boom ending any time soon, but by its definition it’s finite,” he says. “If you’re a small company manufacturing widgets for the oil and gas sector it’s of vital importance to find other markets.”
And Albertan businesses are getting the message. In fact, it seems they’re being really hard on themselves. When asked if they thought Albertan companies were maximizing the opportunities for exporting to the U.S., the sentiment was quite strongly negative. But in fact, Arber says, Albertan exports are growing faster than those from any other province. They grew 5.6 per cent in 2012 over 2011, to $95.4 billion, and have had a cumulative annual growth rate (CAGR) of 5.7 per cent over the last decade.
The energy sector dominates that figure – accounting for 72 per cent of exports – but Arber sees encouraging signs in other sectors, too, pointing to agri-foods (10-year CAGR of 14.7 per cent) and the rapid growth in the export of energy technology. “It’s not overstating the case to say Albertan companies are global leaders in energy technology,” Arber says. “It’s valves, pumps, compressors in the LNG space – a lot of this high-end technology needed for oil and gas extraction.”
The U.S. economy continues to show sluggish signs of recovery from the devastation wrought by the financial crisis of 2008, and we all know how dependant the Albertan economy is on our southern neighbour (it consumes 86 per cent of Albertan exports). But which industries are seeing the greatest impact? It seems the manufacturers are the happiest, and the builders the grumpiest.
“The economic recovery of the U.S. has positively affected my company’s export volumes.”