Nova Scotia exports set to grow by 10 per cent in 2011, says EDC

HALIFAX, Oct. 27 /CNW/ - Nova Scotia's international exports are set to contract by 1 per cent in 2010 before rebounding with 10 per cent growth in 2011, according to a provincial forecast by Export Development Canada (EDC). The province's exports had declined by 24 per cent in 2009 amid the global recession.

"Nova Scotia exports saw a mixed performance this year. Low natural gas prices and production and supply side issues in the fishing industry dragged down overall growth," said EDC Chief Economist Peter Hall. "Meanwhile, exports of tires and forestry related products will likely rack up double-digit gains in 2010."

"Next year, EDC sees an overall bounce back in the province's exports thanks to regained strength in the energy sector, fueled by stronger prices and added production capacity. In contrast to this year, all sectors are expected to increase export sales in 2011."

The agri-food sector, which accounts for 23 per cent of the province's exports, is forecast to decline by 5 per cent in 2010 and increase by 3 per cent in 2011. Although prices of fish and shellfish have rebounded modestly year to date, a lower than expected herring catch coupled with new regulations affecting fisheries' costs will result in slightly negative export receipts for the industry this year. 

EDC expects that Nova Scotia's fisheries exports will experience a modest recovery next year thanks in part to pending improvements in export market certification. The government of Canada has now implemented a Testing Certification Protocol for lobster tomalley to help comply with Japanese import requirements. The new protocol has unfortunately increased costs for exporters, which is likely to reduce Canadian participation in that market. The results of an audit conducted by the U.S. following the contamination in Nova Scotia's basins have been encouraging and a new shellfish sanitation program will also help comply with their import regulations. Finally, the EU's new source identification requirement has been addressed thanks to the national Catch Certification Office in Ottawa.

Auto sector exports are forecast to grow by 14 per cent this year and 7 per cent in 2011. Strength this year reflects the rebound of US vehicle sales from extraordinarily low levels in 2009. Introduction of the new X One model for truck tires at Michelin's Waterville plant, and the expansion of its Bridgewater plant have also boosted 2010 tire exports. Slower growth in US vehicle production will weaken auto sector export sales in the remainder of this year and through 2011. The province's growing motor vehicle supply sector accounts for 19 per cent of Nova Scotia exports.

The forecast is heavily influenced by large swings in energy sector exports. Weak natural gas prices together with a sharp decline in production volumes from the Sable Project sharply reduced natural gas exports this year. Next year, an improved price environment coupled with the startup of production at the Deep Panuke off-shore project will push exports up significantly. According to the National Energy Board,  the Deep Panuke project is expected to increase total natural gas production by 58 per cent in 2011. As a result, after a 30 per cent decrease in 2010, exports in the province's energy sector are forecast to rebound by 47 per cent in 2011.

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 4.33 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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