Energy sector, province's export leader, projected to grow by eight per cent in 2013
ST-JOHN’S, N.L.—Newfoundland’s export growth will see a rebound of six per cent in 2013 after a five per cent decline this year, according to Export Development Canada’s (EDC) forecast for the Atlantic province.
According to EDC, since 2007, the province’s share of exports to emerging markets has more than doubled from seven per cent to 16 per cent in 2011.
This rate of export diversification was among the best in Canada.
“Newfoundland and Labrador exports faltered in 2012 on lower crude oil production, but as capacity comes back on line the energy sector will drive a large gain next year,” EDC chief economist Peter Hall said in a statement.
“Growth will be broadly-based in 2013, with metals (and) the fishery and forestry sectors all contributing to the rebound in exports,” he continued. “With exports accounting for 37 per cent of Newfoundland GDP, the future is indeed bright if the province continues to diversify its sales markets at the same pace as in the last five years.”
Newfoundland’s key international export sectors are energy, industrial goods and fishery, which together account for nearly 98 per cent of the value of the province’s total international sales.
The energy sector is dominant, making up two-thirds of provincial exports, according to EDC.
With that, the arm’s length government agency expects energy exports to grow by eight per cent next year after a decline of nine per cent in 2012.
“Energy prices are weaker, but a U.S.-led global recovery will ensure that near-term volume demand is solid,” Hall said.
Exports of metals and chemicals account for 25 per cent of the province’s total exports, according to EDC, and that is forecast to grow by one per cent next year, following a seven per cent gain in 2012.
EDC credits dropping metal prices that are expected to soften further next year with the relatively weak 2013 projection.
The agri-food sector, which makes up seven per cent of the province’s total exports, will see a partial four per cent recovery next year following a nine per cent decline this year.
Dominated by seafood, the agri-food sector is bearing the brunt of weak crab prices and lower quotas in 2012, according to EDC, but a recovery is expected in 2013.
The balance of the province’s exports consist of a broad mix of goods, including forestry, aerospace and beverages, which are shipped by numerous small- and medium-sized companies.
Apart from forestry, these sectors have experienced significant export growth this year and an additional, modest acceleration is expected next year.
“Newfoundland’s trend-defying increase in exporting companies, from 178 in 1999 to 195 in 2010, and superior trade diversification suggest robust export performance as the U.S. recovery pulls the world into the next growth cycle,” Hall said.