The following was excerpted from material supplied by Export Development Canada, and paints an encouraging picture for the province.
ST. JOHN’S – Following decent growth last year, Newfoundland and Labrador’s international exports are forecast to surge by 17% this year and rise by a more modest 4% in 2012, according to a Global Export Forecast by Export Development Canada (EDC).
“Commodity prices are the big story behind the province’s export outlook, pushing international sales up this year, and then restraining growth in 2012. Higher throughput of iron ore, copper and nickel will offset lower prices to keep overall growth in the black next year,” said Peter Hall, chief economist for EDC. Strong demand from China and Western Europe will add to a broad based recovery in US-bound shipments, giving a major boost to exports of ore.”
The province’s international export picture is led by three key sectors:
- Energy, accounting for 65% of the province’s total exports;
- Industrial goods (particularly base metals), accounting for 24%; and
- Agri-food, accounting for 9%.
Newfoundland and Labrador’s international energy exports are forecast to rise 10% in 2011 before falling by less than 1% in 2012. Falling crude production is anticipated through 2012.
EDC’s forecast for Newfoundland’s industrial goods sector calls for a jump of 37% in 2011 and a further gain of 15% in 2012. The positive outlook is based on favourable developments in the iron ore, copper and nickel sectors. Exports of iron ore will benefit from higher prices this year, and from larger shipments as production ramps up at ArcelorMittal Mines Canada, Cliffs Natural Resources and Labrador Iron Mines Holdings through 2012. Sector prospects beyond 2012 continue to be bright, thanks to investments by New Millennium Capital Corporation and Tata Steel Ltd.
The province’s shipments of copper and nickel are expected to grow owing to the end of the strike at Vale‘s Voisey’s Bay mine, combined with higher output from Beaver Brook antimony mine belonging to Hunan Nonferrous Metals, Teck‘s Duck Pond copper-zinc mine, and other smaller operations.
Canadian exports of goods and services are forecast to rise 12% in 2011 and 7% in 2012. Nationally, economic growth is expected to rise 2.7% in 2011 and 2.4% in 2012. Internationally, EDC is forecasting global growth of 4.1% in 2011 and 4.3% in 2012.
EDC’s semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared. EDC’s Global Export Forecast is available at http://www.EDC.ca/GEF.