ST. JOHN'S, May 10, 2006 -- The value of Newfoundland and Labrador's exports will lead the country with strong growth of 7 per cent in 2006 before leaping to 10 per cent in 2007, according to a provincial export outlook by Export Development Canada (EDC).
Newfoundland and Labrador's exports are driven primarily by the energy sector, which accounts for 68.2 per cent of the province's goods and services shipped abroad, and the industrial goods sector (22.6 per cent).
"Given the continued high price of oil, it comes as no surprise that Newfoundland and Labrador will be among the provincial leaders in energy export growth," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "But it is the significant growth in the province's second largest sector, industrial goods, that has tipped the scales of Newfoundland and Labrador towards the top of the Canadian export leaderboard ."
The oil and gas production companies in the province were behind the province's strong 13.5 per cent export growth in 2005. White Rose continues to ramp up production and should hit full output in the second half of this year. Hibernia had another great year in 2005 and is likely to see output rise through 2007. Boosted by White Rose, total crude production is forecast to rise from 111mn barrels in 2005 to over 120mn barrels in 2006. Production at Terra Nova has had its challenges and remains a forecast risk in 2006 but as these problems are overcome they will add to output next year. Together, international energy exports are expected to rise 9 per cent in 2006 and a further 13 per cent in 2007.
Iron ore dominates the province's industrial goods exports, accounting for 98 per cent of the sector's total export value. Iron ore exports rose a remarkable 94 cent in 2005 on a combination of higher prices and production. Behind the rapid price increase is China's 25 per cent increase in steel production in 2005. China's output of 349mn tons last year was more than the US, Japan, South Korea and Russia combined. Higher prices along with a slight increase in volumes in 2006 and a steady outlook for 2007 suggest iron ore export growth of 21 per cent and 2 per cent, respectively. Nationally, Canadian real GDP growth is forecast to remain stable at 3.0 per cent in 2006 and 2.7 per cent in 2007. Canadian export volumes are forecast to grow by 3 per cent in 2006, up slightly from 2 per cent in 2005. Internationally, EDC is forecasting 4.3 per cent global economic growth in 2006 and 4.1 per cent growth in 2007, down from 4.5 in 2005. The continued healthy performance remains ahead of the historical long term average. EDC's Global Export Forecast is available at http://www.edc.ca/docs/ereports/gef/EFindex_e.htm.
Export Development Canada (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 7,000 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and is a recognized leader in financial reporting, economic analysis and human resource management.
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Media contact: Phil TaylorEDC Public Affairs(613) 598-2904 ptaylor@edc.ca
