According to a provincial export forecast by Export Development Canada, international exports from Newfoundland and Labrador are forecast to rise by 15% in 2010 and 7% in 2011.
EDC's forecast noted that the province's 2010 outlook is dampened by permanent newsprint closures and still weak fundamentals for the seafood industry. The energy sector accounts for 67% of the province's international exports and is forecast to grow by 13% in 2010 and a further 6% in 2011.
Most of the growth will be driven by expected higher oil prices through 2011. EDC's forecast calls for the price of crude to rise to USD 69 per barrel in 2010 and USD 72 per barrel in 2011.
Offshore crude production are expected to fall modestly in 2010 on lower output from Hibernia and Terra Nova, then hold flat in 2011 as another drop at Terra Nova is offset by higher production at satellite fields for Hibernia and White Rose.
Mr Peter Hall chief economist at EDC said that the growth in Newfoundland's exports this year and next will be driven by higher petroleum prices and the reopening of idled mining capacity with an expected turnaround in the seafood sector next year.
Mr Hall said that the province's exports plunged 42% in 2009 amid the global economic crisis. After a 42% plunge last year, Newfoundland is beginning the rebound process. Even with growth of 15% and 7% in 2010 and 2011, exports will remain 28% below peak 2008 levels. Like many provinces this year, it's a slow climb out of the canyon, but Newfoundland is definitely moving in the right direction.
Mr Hall said that on a more positive note, construction on the Hebron project is still slated to start in 2012. Exports of refined products from the Come by Change refinery should record significant growth on higher export prices and volumes this year. Ongoing construction of mega projects means the long term outlook is bright, but these projects will not affect exports through 2011.
He said that the outlook for the province's industrial goods, mostly iron ore, has once again turned on a dime. Global steel production, the main demand driver for iron ore, plunged 8% in 2009. With global industrial production now rebounding from last year's depressed levels steel demand is on the rise."
