ST. JOHN'S, May 25 /CNW Telbec/ - International exports from Newfoundland and Labrador are forecast to rise by 15 per in 2010 and 7 per cent in 2011, according to a provincial export forecast by Export Development Canada (EDC).
"The growth in Newfoundland's exports this year and next will be driven by higher petroleum prices and the reopening of idled mining capacity, with an expected turnaround in the seafood sector next year," said Peter Hall, Chief Economist at EDC.
The province's exports plunged 42 per cent in 2009 amid the global economic crisis. "After a 42% plunge last year, Newfoundland is beginning the rebound process, "said Mr. Hall during a speech in St. John's. "Even with growth of 15% and 7% in 2010 and 2011, exports will remain 28% below peak 2008 levels. Like many provinces this year, it's a slow climb out of the canyon, but Newfoundland is definitely moving in the right direction."
EDC's forecast noted that the province's 2010 outlook is dampened by permanent newsprint closures and still-weak fundamentals for the seafood industry.
The energy sector accounts for 67 per cent of the province's international exports, and is forecast to grow by 13 per cent in 2010 and a further 6 per cent in 2011.
Most of the growth will be driven by expected higher oil prices through 2011. EDC's forecast calls for the price of crude to rise to US$69/brl in 2010 and US$72/brl in 2011.
Offshore crude production are expected to fall modestly in 2010 on lower output from Hibernia and Terra Nova, then hold flat in 2011 as another drop at Terra Nova is offset by higher production at satellite fields for Hibernia and White Rose.
"On a more positive note, construction on the Hebron project is still slated to start in 2012," Mr. Hall said.
"Exports of refined products from the Come-by-Change refinery should record significant growth on higher export prices and volumes this year. Ongoing construction of mega-projects means the long-term outlook is bright, but these projects will not affect exports through 2011."
The industrial goods sector accounts for 21 per cent of the province' international exports, and EDC believes the sector will grow by 29 per cent in 2010 and 6 per cent in 2011.
"The outlook for the province's industrial goods, mostly iron ore, has once again turned on a dime," Mr. Hall said. "Global steel production, the main demand driver for iron ore, plunged 8% in 2009. With global industrial production now rebounding from last year's depressed levels, steel demand is on the rise."
Production cutbacks at IOC and Wabush will be reversed this year, and EDC anticipates higher export volumes through 2011.
The agrifood sector, accounting for 9 per cent of the province's total exports, is expected to decline by 1 per cent in 2010 before rebounding with 9 per cent growth in 2011.
"Fishers can't seem to get a break, as still-soft consumer demand in the US and Japan keep prices low, the dollar once again looks threatening and input costs have risen", Mr. Hall said.
The 2010 decline of 1% assumes little change in shrimp landings and only modest changes in prices for key species (mostly crab and shrimp). Next year's 9% growth assumes a continued firming of global consumption, lifting prices and helping to make the harvesting of shrimp more economical.
Canadian exports are forecast to rise 11 per cent in 2010 and 7 per cent in 2011. Nationally, economic growth is expected to rise 2.5 per cent in 2010 and 2.9 per cent in 2011. Internationally, EDC is forecasting global growth of 3.7 per cent in 2010 and 4.2 per cent in 2011. 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 8,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been recognized as one of Canada's Top 100 Employers for nine consecutive years.
SOURCE Export Development Canada
For further information: For further information: Media contacts: Phil Taylor, Export Development Canada, Tel: (613) 598-2904, Blackberry: email@example.com