ST. JOHN'S, May 22, 2012 /CNW/ - Newfoundland and Labrador's international exports are forecast to grow by 5 per cent this year and 7 per cent in 2013 after a blistering 31 per cent growth in 2011, according to the Global Export Forecast released today by Export Development Canada (EDC).
"The province's export sector, which is dominated by commodities, benefited from skyrocketing energy prices and strong demand for iron ore last year, sending overall foreign sales soaring," said Peter Hall, Chief Economist of EDC. "A continued surge of industrial goods exports will partly offset sluggish energy sector sales this year."
The three key exporting sectors in Newfoundland and Labrador are energy, accounting for 66 per cent of the province's total exports; industrial goods, accounting for 25 per cent, and agri-food, accounting for 7 per cent.
EDC's forecast calls for the province's energy sector exports to grow by 4 per cent in 2012 and 2 per cent in 2013.
"Falling production at Hibernia will be partly offset by gains from Hibernia South and White Rose. With prices floating around USD 100/bbl this year, profit margins should remain healthy," Hall said. "Next year, we expect WTI crude to edge back to $95/bbl."
EDC predicts that Newfoundland's industrial goods sector will see growth of 11 per cent this year and 19 per cent in 2013.
"The outlook for industrial goods is bright both this year and next, with higher export volumes more than offsetting softer prices," Hall said. "Foreign sales of iron ore will continue to build as a result of ramped-up production. Sector prospects beyond 2013 continue to be bright, thanks to significant investment by New Millennium Capital Corporation and Tata Steel."
Exports of the province's agri-food sector are forecast to grow by 3 per cent this year and 3 per cent in 2013.
"Crab prices will continue to receive a boost from weak Alaskan supplies, but salmon prices are dropping fast as Chilean supplies return to the market. Weak prices will persist, but the net effect will be a slight overall improvement."
Hall was in St. John's today to share his forecast with the province's exporters, the 13th stop of an 18-city cross-Canada tour. The tour is designed to offer market- and sector-specific insights to help Canadian exporting companies grow their international business.
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. Read EDC's Global Export Forecast.
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 7,700 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.
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