(ST. JOHN'S) November 26, 2007 International exports from Newfoundland and Labrador will surge 16.7 per cent this year to lead the country and a further 5 per cent in 2008, according to a provincial export outlook by Export Development Canada (EDC).
"Newfoundland and Labrador's export growth will lead the country this year thanks to higher energy and ore shipments, and to a much smaller degree, transportation equipment," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. "In 2008, a weaker Canadian dollar will continue to fuel the province's growth and a potential rebound in the forestry sector."
The energy sector accounts for 70.5 per cent of the province's export picture. EDC is forecasting a 16 per cent increase in energy exports this year and another 7 per cent increase in 2008. Total production of crude is forecast to be 130 million barrels this year, with approximately half destined for international markets. Production is expected to rise to nearly 150 million barrels in 2008 as a result of higher output from White Rose and Hibernia. EDC is forecasting WTI crude to average US$64/barrel in 2008, down slightly from 2007, and that the province's export values to move in line with refined petroleum product prices. The longer term outlook for energy is positive, with possible consideration being given to construction of a second refinery and the go-ahead given for Hebron.
The industrial goods sector, representing 12.6 per cent of the province's exports, posted a massive 40 per cent increase this year, as summer shipments of nickel and copper totaled $400 million. While the impact on international exports will be significant, there will be no increase to the province's real GDP since these volumes of ore were not processed in Canada. As global economic activity slows, Asian steel demand for iron ore is forecasted to remain high, thereby maintaining prices. In addition to a lower Canadian dollar and higher production levels, exports of iron ore are forecast to grow by 14 per cent in 2008.
Nationally, Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007, and 2.6 per cent in 2008. Key price gains in commodities have put Canadian exports on track to increase by 3.7 per cent in 2007, but the impact of weaker U.S. and global demand will have the export growth rate more than halved to 1.5 per cent in 2008. Internationally, EDC is forecasting a 4.9 per cent growth rate in 2007, and 4.5 per cent in 2008. EDC's Global Export Forecast is available at http://www.edc.ca/gef.
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 6,400 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 recognize as one of Canada's Top 100 Employers for seven consecutive years.
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Media contact:
Phil TaylorEDC Public Affairs(613) 598-2904ptaylor@edc.ca
