Newfoundland's exports cut in half in 2009, says EDC

    ST. JOHN'S, May 19 /CNW Telbec/ - Newfoundland and Labrador's
international exports will drop by half in 2009, resulting in the largest
decline in the country according to a provincial export outlook by Export
Development Canada (EDC). EDC expects exports to rebound a modest 7% in 2010.
    "Newfoundland and Labrador will have a tough go in 2009 as massive
commodity price declines and production cutbacks lead to high double digit
drops for energy, industrial goods, and forestry exports," said Peter Hall,
Chief Economist of EDC.
    "In 2010, gains in prices for key commodities like crude oil and iron ore
will lift the value of the province's exports, but volumes will likely weaken
again as crude production continues to fall. Ongoing mega construction
projects mean the long-term outlook is bright, but the export benefits of
these projects lie largely beyond 2010."
    The energy sector accounts for 76 per cent of the province's total export
picture. In 2009, EDC expects a 57 per cent drop in the province's
international energy exports, driven mainly by the projected fall in crude oil
    EDC's oil price forecast calls for an average of USD 47/brl in 2009, and
EDC expects that this price drop will lead to a decline of 20 per cent in the
province's export volumes of crude as lower production at the Hibernia, Terra
Nova and White Rose platforms sets in. Production will continue to decline
throughout 2010 but at a decelerated rate thanks to additions of White Rose
satellite fields and Hibernia South.
    Despite the financial market turmoil, however, construction on the Hebron
project is still expected to start in 2012. Exports of refined products from
the Come-by-Change refinery will follow EDC's forecast for crude oil and
related product prices, expected to average USD 55/brl in 2010.
    The agrifood sector accounts for 6 per cent of the province's total
export picture. While commercial fishermen have seen the combined pressures of
high oil prices and a high CAD disappear since last year, faltering demand in
the wake of the global recession has now set in. This will drive agrifood
exports down 4 per cent in 2009 before a modest price increase adds to the
underlying strength in the emerging aquaculture sector.
    Exports of farmed salmon and steelhead trout could see tremendous upside
as a result of the province's significant coastline and ongoing investments.
EDC does not anticipate any major quota adjustments for key species such as
crab or shrimp through 2010, but there is some upside for landings of lesser
valued ground fish.
    Canadian exports are forecast to decline by 22 per cent in 2009 before
rebounding by 7 per cent in 2010. Nationally, economic growth is expected to
decline by 2 per cent in 2009 with a slight increase of 1.7 per cent in 2010.
Internationally, EDC is forecasting a 1.3 per cent decline in 2009 and 2.3 per
cent increase in 2010 in global GDP. EDC's Global Export Forecast is available

    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 8,300
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 eight consecutive years.

For further information:

For further information: Media: Phil Taylor, Export Development Canada,
(613) 598-2904, Blackberry:

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