New Brunswick export growth to lead country in 2010, says EDC

MONCTON, NB, Oct. 28 /CNW/ - New Brunswick's international exports are set to lead the country with 25 per cent growth in 2010, according to a provincial forecast by Export Development Canada (EDC). The province's exports are forecast to grow by a slower 3 per cent in 2011.

"No other province will come close to New Brunswick's explosive growth this year," said EDC Chief Economist Peter Hall. "What is more, the province will build on this year's gains in 2011. Although global growth will slow next year, each of New Brunswick's major export categories is forecast to post modest growth."

"A number of factors contributed to the growth surge in 2010. Better prices for energy products, lumber and pulp, plus higher exports of potash and the ramp-up of production at the LNG regasification plant in Saint John together produced a banner year," said Mr. Hall.

"A weaker U.S. outlook and lower prices for oil and pulp will put a damper on export sales in 2011, slowing EDC's export forecast to a modest 3 per cent."

The province's export picture is dominated by the energy sector, accounting for nearly 65 per cent of New Brunswick's international sales. The sector is expected to grow by 33 per cent in 2010 and 2 per cent in 2011.

"The opening of the Saint John LNG regasification plant in September 2009 will provide a significant boost to exports through 2011, as production ramps up and industrial production in New England regains momentum," Mr. Hall said. "However, most of the increase in energy export earnings this year will be due to higher prices for refined petroleum products, following the rise of crude prices from US$62 in 2009 to US$77 per barrel in 2010."

"Growth in energy exports will slow to a crawl in 2011 as lower oil prices are offset by higher natural gas prices and the completion of the Point Lepreau refurbishment. While shale gas exploration activity has taken off in New Brunswick, production and the resulting growth in exports still remain a few years away."

The forestry sector is the second largest export industry in New Brunswick, accounting for 13 per cent of the province's total exports, and is forecast to grow by 6 per cent in 2010 and 5 per cent in 2011.

"Forestry sector exports will see growth this year for the first time in 5 years, despite lower prices for lumber and pulp in the second half of 2010," Mr. Hall said. "Even so, shipments remain at depressed levels, given the weak world economy and the sorry state of the US housing market."

"Growth will also be modest next year. US housing starts are expected to pick up, but only in the latter half of the year. Higher prices for New Brunswick's paper grades will help boost paper product sales, although these gains will be partly offset by lower pulp prices. Pulp capacity expansion is still planned for 2012 at AV Cell and AV Nackawic, which may lead to temporary idling of capacity in 2011."

The industrial goods sector accounts for 8 per cent of the province's export total, and is forecast to grow by 32 per cent in 2010 and 6 per cent in 2011. Greater exports of potash from the PotashCorp Sussex mine will make a significant contribution to the anticipated 32 per cent increase in industrial goods exports this year, despite the expected 35 per cent decline in prices. However, it's important to remember this year's increase is relative to the mine being shut down for almost half of 2009.

Canadian exports are forecast to rise 11 per cent in 2010 and 6 per cent in 2011. Nationally, economic growth is expected to rise 3 per cent in 2010 and 2.2 per cent in 2011. Internationally, EDC is forecasting global growth of 4.3 per cent in 2010 and 3.9 per cent in 2011. EDC's Global Export Forecast is available at http://www.edc.ca/gef.

EDC's semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of risks for which exporters should be prepared.

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 8,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been recognized as one of Canada's Top 100 Employers for nine consecutive years.

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Media contacts:

Phil Taylor
Export Development Canada
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