St. John’s May 30, 2007 The value of Newfoundland and Labrador’s international exports are expected to increase by 3 per cent in 2007 before declining by 3 per cent in 2008, according to a provincial export outlook by Export Development Canada (EDC).
“Energy exports continue to form the backbone of Newfoundland and Labrador’s export economy, and the province’s anticipated increase in production should offset the negative effect of modest price declines through 2007 and 2008,” said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. The energy sector accounts for approximately 72 per cent of the province’s goods shipped abroad, followed by the industrial goods sector (12 per cent).
The province’s exports of energy are forecast to grow by 2 per cent in 2007 and shrink 3 per cent in 2008. Positive forces driving exports include iron ore and seafood products. Crude oil exports, the principal energy product, were estimated to have totaled between $3.9 and $4.1 billion in 2006. In 2007, EDC expects total crude exports to increase to 140 million barrels as White Rose offsets a slight decline in output from Hibernia and problems at Terra Nova. Looking ahead to 2008, improved conditions at Terra Nova and enhanced efforts at the other two offshore facilities should boost output to a total of 150 million barrels while the price should fall further to USD50/bbl. Crude is expected to drop in price to USD55/bbl in 2007 from an average of USD66/bbl in 2006.
Industrial goods exports will get a lift this year on higher production from Duck Pond (copper and zinc) along with increased exports of iron ore although there is some risk to the latter owing to recent labour action. Altogether, industrial goods exports from Newfoundland and Labrador are forecast to rise 10 per cent in 2007. However, lower metal prices in 2008 could lead to a 6 per cent drop in the industrial goods sector in 2008.
Nationally, Canadian export volumes are forecast to decline by 1 per cent in 2007 before rising by a modest 1 per cent in 2008. Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007 and 2.9 per cent in 2008. Internationally, EDC is forecasting 4.5 per cent global economic growth in 2007 and 4.6 per cent growth in 2008. EDC’s Global Export Forecast is available at http://www.edc.ca/gef.
Export Development Canada 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 has been named one of Canada’s Top 100 Employers for six consecutive years.
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Media contact: Phil TaylorEDC Public Affairs(613) 598-2904 ptaylor@edc.ca
