New Brunswick's export growth modest through 2014, according to EDC
MONCTON, NB, May 21, 2013 /CNW/ - New Brunswick's export story over the next two years will be impacted by slower growth in refined petroleum shipments that will mask solid growth in the forestry sector, according to Export Development Canada's (EDC) Global Export Forecast.
EDC's Chief Economist, Peter Hall, was in Moncton today for a lunchtime presentation to members of Tech South East to deliver his provincial export forecast, where he predicted the province's exports will grow by 4 per cent in 2013 and 2 per cent in 2014.
"This year's gains come from a broad range of sources, and would be much stronger were it not for the closing of the Brunswick Mine after 50 years of production," said Mr. Hall. "Next year, growth will be held back by flat energy exports. Take energy exports out of the equation, all other sectors are rising by a respectable 6 per cent in 2014 on gains from forestry, agri-food and industrial goods."
Energy accounts for a dominant 72 per cent of New Brunswick's international exports. Mr. Hall predicted that provincial exports in this sector will grow by 4 per cent in 2013 before sliding towards zero growth in 2014.
"Energy exports will get some lift from a double-digit increase in natural gas prices this year," said Mr. Hall. "Modest increases in LNG export volumes are included in our forecast, but with prices heading up, volumes could be stronger. Production of refined petroleum products should hold steady, getting a slight lift from a weaker Canadian dollar. A full year of production at the Point Lepreau nuclear power plant could bring a significant increase in electricity exports."
The forestry sector accounts for 10 per cent of the province's total international sales. EDC's forecast predicts the sector to grow by 9 per cent this year and another 8 per cent in 2014.
"Wood product exports will receive a major boost from positive momentum in U.S. housing, with starts expected to rise nearly 34 per cent this year and another 24 cent in 2014," said Mr. Hall, who is bullish on the U.S. economy. "Some previously closed mills have reopened, but capacity constraints are likely to limit the province's ability to take full advantage of stronger U.S. demand. Unfortunately, the outlook for the rest of forestry isn't as good, with modest declines expected for both newsprint and pulp this year and next.
Closure of the Brunswick mine will weigh on the industrial goods forecast (6 per cent of total exports), but hidden in the numbers is significant positive offset as production ramps up at the Sussex mine.
EDC's forecast also noted that the U.S. recovery that is taking shape will mean solid growth for the province's machinery and equipment producers and agri-food sales through 2014.
New Brunswick's exports to emerging markets account for 7 per cent of the province's total, unchanged from 2008. Brazil tops the list of emerging market destinations, followed by China, India and Turkey.
Nationally, Canadian merchandise exports are forecast to rise 8.6 per cent in 2013 and 5 per cent in 2013, while economic growth (GDP) is expected to rise 2.2 per cent this year and 1.9 next year. EDC is forecasting global growth of 3.6 per cent in 2013 and 4.2 per cent in 2014.
EDC's semi-annual Global Export Forecast addresses the latest global export conditions including market- and sector-specific insights to help Canadian exporting companies grow their international and minimize risk. It also analyzes a range of risks for which exporters should be prepared. Read EDC's Global Export Forecast.
EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 7,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.
SOURCE Export Development Canada