Newfoundland and Labrador to see export recovery in 2016: EDC

Wednesday May 06, 2015
Written by Manufacturing AUTOMATION
May 6, 2015 - Low commodity prices will cause Newfoundland and Labrador’s exports to drop by up to 14 per cent this year before seeing double digit recovery in 2016, says Export Development Canada (EDC).

“The drop in oil prices has hit the Newfoundland and Labrador hard, as energy makes up the lion's share of the provinces exports,” said Peter Hall, chief economist of EDC. “Right now the energy sector is over-correcting after years of artificially-high prices. Today’s prices are an unfortunate consequence of global economic recovery, but we expect prices to bounce back $70 per barrel in 2016.”

EDC’s outlook predicts Newfoundland and Labrador’s energy export growth will jump by 21 per cent in 2016. Across all sectors, the total export forecast for the province is a decline of 14 per cent in 2015 and a 19-per-cent rebound in 2016.

“This year’s good news for Newfoundland and Labrador will come from emerging markets,” said Hall. “A rapidly-rising emerging market middle class and recovery in the U.S. will see agriculture exports soar by 17 per cent this year.”

Meanwhile the machinery, auto parts and aerospace sectors are expected to see gains in 2015 with a growth forecast of 12 per cent.

“The lower Canadian dollar is actually an asset in this case,” said Hall. “This is helping to entice foreign investment in a low-price year. As U.S. industry starts to feel the effects of its capacity crunch, it'll be scanning for new areas to invest.”

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