Canada’s exports seen growing 11 pct in 2010

* Key sectors like autos still making up for lost ground

* Strong growth expected in energy, forestry, fertilizer

* EDC sees Canadian economic growth 2.5 pct in 2010

* Cautions Global recovery remains elusive

* Strong C$ could hamper export recovery

OTTAWA, April 27 (BestGrowthStock) – Canadian exports will grow
sharply this year but the economic recovery will be a two-speed
one, with exports taking longer to bounce back than domestic
spending, the federal export credit agency said on Tuesday.

Export Development Canada (EDC) estimates 11 percent growth
in exports this year and 7 percent growth in 2011.

But the EDC’s chief economist, Peter Hall, was much more
skeptical about the pace of growth than the government or Bank
of Canada, and cautioned of some big risks that could derail
the recovery.

“Despite over a year of proclamations to the contrary,
global recovery remains elusive,” Hall said.

EDC estimates 2010 economic growth of 2.5 percent, compared
with the Bank of Canada’s estimate of 3.7 percent and the
government’s 3.1 percent forecast, based on the average of
private sector economists.

In 2011, EDC expects 2.9 percent growth as public stimulus
wanes and private-sector demand finally picks up speed.

Canada’s economy has been more bubbly than expected,
expanding by 5 percent in the fourth quarter at annual rates,
and is expected to match that in the first quarter.

But government stimulus measures and consumer spending are
doing much of the heavy lifting. Export sectors will need to
see more of a pickup in U.S. demand in order to contribute to
economic growth they way they did prior to the crisis.

One of the main drivers of export growth this year will be
double-digit growth in auto shipments, Hall said. But that will
not compensate for the roughly 20 percent decline in 2008 and a
28 percent slide last year.

Strong growth is also expected in energy, forestry and
fertilizer exports — the same industries that were hardest hit
during the global recession.

“Even for the faster-growth sectors, activity levels will
still be well below previous peak activity by year-end,” the
EDC said.

The strong Canadian dollar, which is currently around
parity with the U.S. dollar, could make Canadian products
costlier for foreign buyers, weighing on exporters’ comeback
and significantly limiting growth, Hall said.

However, the EDC’s forecast assumes some decline in the
value of the currency from present levels, along with an easing
of commodity prices.

Canada’s trade surplus reached C$1.4 billion ($1.4 billion)
in February after three months of deficits.

Investment Analysis

($1=$1 Canadian)
(Reporting by Louise Egan; editing by Rob Wilson)

Canada’s exports seen growing 11 pct in 2010