The Province's manufacturing industry moved ahead with a strong showing in 1995. Shellfish processing and newsprint manufacturing, the backbone of the sector, both made solid gains. These segments of the manufacturing base add value to the Province's primary resources. Virtually all fish products and newsprint produced in the Province are exported. Furthermore, a new high-value added component of the sector also started to emerge as the Province's progressive business incentives continue to add to an already diversifying manufacturing base.

Manufacturing shipments in the Province grew by an estimated 8.6 percent last year to $1.5 billion. This represents the largest year-over-year increase in shipments since 1987 and the third consecutive year of growth.

The manufacturing sector benefitted from improved markets for key commodities last year. Newsprint values rose due to a significant increase in prices while shellfish production, particularly crab, reached new highs due to record catch levels and buoyant markets.

An EDGE for Newfoundland

The Provincial government identified in its Strategic Economic Plan the need to stimulate growth and diversify the manufacturing industry. As part of its effort to accomplish this goal, Government has introduced a number of initiatives over the last three years. In 1993 the Provincial tax rate for manufacturing and processing income was reduced from 17 percent to 7.5 percent. The tax rate remained at this level in 1994, and was reduced to five percent on January 1995, making it the lowest manufacturing tax rate in the Country.

Another initiative, the Economic Diversification and Growth Enterprises (EDGE) program, was introduced in 1995. EDGE provides a tax holiday and other benefits for companies looking to expand or establish new enterprises in the Province. These incentives have been successful in advancing manufacturing in the Province. Well over half of the companies given EDGE status to date have a manufacturing focus (17 out of 28). These companies are active in a wide range of areas and add considerable value to their products. Overall, EDGE approvals to date will result in the creation of about 925 new jobs and close to $68 million in new investment.

Increasingly, the Province is being viewed as an ideal location for business, especially manufacturing enterprises. It has a highly motivated, loyal workforce, close proximity to markets in the Americas and Europe and ample resources. The EDGE program provides just one more reason for a firm to locate to the Province.

Outlook

The manufacturing sector is expected to build on gains made in the last several years. The value of newsprint shipments is expected to be up again this year and shellfish production should be near historic highs. The emerging high-value added component will continue to grow and contribute to the sector.