Oil exports to decline while industrial goods and forestry export sales grow ST. JOHN'S, November 16, 2004 -- Lower oil prices will see overall export sales from Newfoundland and Labrador decline by 2 per cent in 2005 according to a provincial outlook released today by Export Development Canada (EDC). Export sales from the province are expected to grow by 1 per cent in 2004. "Declining oil prices in 2005 colour an otherwise positive outlook for Newfoundland and Labrador exporters," says EDC vice-president and chief economist Stephen Poloz. "All other major export sectors are expected to grow, with industrial goods and forestry forecast to show double-digit growth." Energy exports are expected to decrease 1 per cent in 2004 and 12 per cent in 2005 as oil prices fall from peaks attained in 2004. The province's oil production is unlikely to change much over the forecast horizon but international exports could show volatility as a result of shipments to other provinces. From a GDP perspective this diversion of exports has a neutral impact as lower international exports are offset by higher interprovincial exports. Exports of industrial goods are forecast to grow 18 per cent in 2005 following 2004's 10 per cent growth. Iron ore dominates the industrial goods sector, and with voracious Chinese demand for the metal expected to continue export values will move higher. Forestry exports are expected to grow by 15 per cent in 2005, a significant reversal from the sector's 1 per cent decline in 2004. This outlook is based on improved newsprint exports as that industry benefits from increased newsprint advertising revenue and ad lineage. Agri-food exports, primarily seafood, are expected to stabilize at 2 per cent growth in 2005, down slightly from 3 per cent growth forecast for 2004. Next year's outlook depends on our assumptions of continued high prices for crab, a modest decrease in crab landings and modest improvement in shrimp prices. Newfoundland and Labrador's exports in 2004 will reach just over $4.8 billion, a 1 per cent increase over the previous year. Export sales are set to fall to slightly more than $4.7 billion in 2005. Energy will represent the province's largest export sector in 2004, at 52 per cent of the total, followed by agri-food at 22 per cent and industrial goods at 13 per cent. Nationally, the economy is expected to grow by 3.2 per cent in 2005, roughly on par with 2004, and export sales should increase by 1 per cent in 2005, after rising by 9 per cent this year. A copy of EDC's Global Export Forecast is available on EDC's web site: http://www.edc.ca/docs/ereports/gef/EFindex_e.htm. EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates on commercial principles. - 30 - Media Contact: Glen Nichols Public Affairs Tel.: (613) 598-2876 E-mail: glnichols@edc.ca
