Newfoundland exports to rise through 2011 after big drop in 2009, says EDC

ST. JOHN'S, NL, Oct. 26 /CNW/ - Newfoundland and Labrador's international exports are set to rise by 9 per cent in 2010 and 6 per cent in 2011 after a massive 42 per cent decline in 2009, according to a provincial forecast by Export Development Canada (EDC).

"Newfoundland's export outlook reflects a world economy experiencing a mid-recovery slowdown. International sales will not climb back to pre-recession levels, but instead will experience moderating, single-digit growth," Mr. Hall said.

"Still, risks are high and any additional downshifting in global activity would impact prices and demand for commodities and seafood products, both of which are key export sectors for the province. "Energy exports will offset weakness in other major export categories in 2010, with seafood export growth expected to slow through the remainder of the year."

Energy exports dominate the province's international sales, accounting for 67 per cent of the overall total. EDC Economics is forecasting a 15 per cent increase in the province's energy exports this year, to be followed by another 2 per cent rise in 2011. Most of this year's growth will be driven by higher prices, predicting WTI crude to average US$77 per barrel in 2010, compared to an average of US$62/brl in 2009. EDC expects prices will soften to US $75 per barrel in 2011, but exports will rise on modestly higher shipment volumes of both crude and refined outputs.

Industrial goods, primarily metal ores, account for 21 per cent of the province's total international exports. EDC's forecast calls for provincial exports in this sector to fall 3 per cent this year before rising 23 per cent in 2011. "Official data for 2010 seem to be at odds with iron ore shipments," Mr. Hall said. "Next year's hefty increase comes thanks to higher shipments of iron ore and nickel."

Weak consumer demand in the U.S. and Japan will hold agri-food exports to 3 per cent growth in 2010 and 2011. "Market prices for crab and shrimp are rising from the dismal lows seen during the recession, but strength in the Canadian dollar and high fuel costs will continue to erode much of these gains," Mr. Hall said. EDC's forecast did not include any major adjustments to shellfish quotas through 2011. The emerging aquaculture sector remains a bright spot in the forecast.

Canadian exports are forecast to rise 11 per cent in 2010 and 6 per cent in 2011. Nationally, economic growth is expected to rise 3 per cent in 2010 and 2.2 per cent in 2011. Internationally, EDC is forecasting global growth of 4.3 per cent in 2010 and 3.9 per cent in 2011. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

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 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.

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Media contact:
Phil Taylor   
Export Development Canada
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