OTTAWA - November 28, 2006 - The value of Newfoundland and Labrador's exports will lead the country with growth of 16 per cent in 2006 and 11 per cent in 2007, according to a provincial export outlook by Export Development Canada (EDC).
"Energy exports continue to drive Newfoundland and Labrador's exceptional growth, and the province's anticipated increase in production should offset the negative effect of price declines through 2007," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. The energy sector accounts for approximately 70 per cent of the province's goods shipped abroad, followed by the industrial goods sector (11.6 per cent).
The province's exports of energy are forecast to grow by 21 per cent in 2006 and 13 per cent in 2007. Crude oil exports, the principal energy product, were estimated to have totaled between $3.5 and $3.6 billion in 2005. In 2006, EDC expects crude exports to increase to 120 million barrels as White Rose offsets a slight decline in output from Hibernia and problems at Terra Nova. Higher crude prices boosted oil exports by an estimated 24 per cent in 2006. Looking ahead to 2007, improved conditions at Terra Nova and enhanced efforts at the other two offshore facilities should boost output, offsetting lower oil prices and lifting crude exports by 17 per cent.
Iron ore dominates the province's industrial good exports, accounting for 98 per cent of the sector's total export value. Iron ore exports from Newfoundland and Labrador rose 94 per cent in 2005 on a combination of higher prices and production, largely as a result of China's voracious demand for steel. In 2007, EDC expects prices for iron ore to be relatively unchanged but slightly higher export volumes and a slightly lower Canadian dollar will boost export. Together, Duck Pond and iron ore exports from Labrador City and Wabush should boost industrial goods exports 18 per cent this year and another 8 per cent in 2007.
Agri-food exports are expected to finish 2006 in negative territory, but the outlook for 2007 is more positive as output levels off alongside a modest improvement in pricing. Capacity cutbacks have reduced newsprint production in 2006 but the situation is expected to stabilize in 2007. While a small part of the province's export profile, shipments of high value-added manufactured goods have shown significant gains in 2006. These include aerospace components, computer-related goods, navigation equipment and industrial machinery.
Nationally, Canadian economic growth is forecast to remain stable at 2.8 per cent in 2006 and 2.4 per cent in 2007. Canadian exports are forecast to grow by 3 per cent in 2006 before declining by 1 per cent in 2007. Internationally, EDC is forecasting 4.8 per cent global economic growth in 2006 and 4.0 per cent growth in 2007. 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) 796-4368ptaylor@edc.ca
