Weaker oil prices and production slow Newfoundland and Labrador's export growth to 2 per cent in 2012, predicts Export Development Canada

ST. JOHN'S, Nov. 2, 2011 /CNW/ - On the heels of a banner year for the province's international exports in 2011, which saw a 21 per cent gain, Newfoundland and Labrador's exports will see growth slow to 2 per cent in 2012 as both oil prices and production weaken, according to a Global Export Forecast by Export Development Canada (EDC).

"Falling production and world oil prices will deal the province's energy sector a one-two punch in 2012, but aggressive growth in mining exports will save the day," said Peter Hall, EDC's Chief Economist .

Hall was in St. John's today to share his forecast with EDC customers, the second stop on a 10-city cross-Canada tour.

"Given the dominance of the energy sector in the provincial export picture, it is remarkable that growth in the much smaller mineral industry will be able to offset the decline in energy exports next year." Energy exports account for almost two-thirds of the province's exports, with mineral shipments adding a further 24 per cent.

Newfoundland and Labrador's international energy exports are forecast to decline by 8 per cent in 2012 after rising 5.5 per cent in 2010 and an impressive 17 per cent this year.

"EDC expects oil prices to remain close to current levels as the global economy recovers. The unwinding of speculative pressure is expected to lower WTI crude from an average of USD 94/brl in 2011 to USD 85/brl in 2012. Further shocks to world growth threaten to further undermine global oil prices."

EDC's forecast for Newfoundland's industrial goods sector calls for a jump of 25 per cent in 2012 on top of an even more stunning 32 per cent gain this year.

"The province's iron ore shipments are in the sweet spot, basking in sizzling global demand for steel. Prices are strong and production is forecast to rise at IOC, Wabush and Labrador Iron Mines. Longer term, investments by New Millennium and Tata Steel should set up the province's industrial goods exports for many years of growth."

Canadian exports of goods and services are forecast to rise 11 per cent in 2011 and 7 per cent in 2012. Nationally, economic growth is expected to rise 2.3 per cent in 2011 and 2.4 per cent in 2012. EDC is forecasting global growth of 3.7 per cent in 2011 and 4.3 per cent in 2012.

EDC's semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 8,200 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.

B-Roll footage of Peter Hall's forecast comments available at: http://Exportwise.ca/listvideo_en.

SOURCE Export Development Canada

For further information:

Media contacts:

Phil Taylor
Export Development Canada
Tel: 613.598.2904
BlackBerry: ptaylor@edc.ca


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