According to Export Development Canada’s Global Export Forecast, 2017 will be a better year for Newfoundland & Labrador.
Challenges in our energy sector are the primary force driving the province’s exports down. “Newfoundland and Labrador’s exports are expected to decline further in 2016, falling by 11% before a strong recovery of 18% in 2017. Weak commodity prices continue to eat away at the bottom line despite volume growth in the mining sector.”
But “a large proportion of the drop will be recovered in 2017 as prices rebound and new capacity comes online after prolonged delays. In the energy sector, weak oil prices coupled with falling production in mature wells will result in oil exports declining 18% in 2016. Shipments will rebound in 2017, growing by 23%, as production returns to normal levels.”
The province’s exports are expected to rebound strongly with 18% growth in 2017, as the exploration and development efforts initiated a few years ago will soon come to fruition and “compensate for production declines caused by the maturing wells.” Hebron oil field, for example, is on track to pump its first oil by the end of 2017.
Metals & Ores
The outlook for metals, ores, and other industrial goods exports “will remain depressed as receipts are expected to grow by a meager 2% in 2016,” but “while export prices for iron ore continue to fall, Tata Steel’s investments in metal ore prospects are forecast to offset some of the recent volume declines and to boost production this year and beyond.” This will result in 16% growth in 2017.
“Newfoundland and Labrador’s agri-food sector, dominated by seafood, will benefit from the persistently strong price of shrimp and somewhat higher prices for crab, as well as the weak Canadian dollar. Together, these factors will offset falling volumes in shrimp and crab.”
“The balance of the province’s exports includes a broad basket of goods, including machinery, motor vehicle parts, and aerospace. Manufacturing, except for petroleum-related exports, will continue to see strong activity. We expect exports in this diversified category to benefit significantly from the drop in the Canadian dollar in 2016 before moderating in 2017.”