New Brunswick export sales will grow by four per cent this year as non-energy exports post strong gains, according to a provincial export outlook from Export Development Canada (EDC).
“We expect a change in fortunes among New Brunswick’s principal export sectors in 2004,” says EDC senior vice-president and chief economist Stephen Poloz. “The energy sector, which fuelled provincial export growth last year, will under perform while other important industries will benefit from a strong U.S. and global economic environment and will sustain export growth levels going forward.”
New Brunswick’s electricity exports will benefit from higher prices and volumes as industrial demand from the North Eastern U.S. rises. However, at just four per cent of the province’s energy exports, electricity exports will be dwarfed by refinery output. With oil prices trending downward and no change in capacity at the Saint John refinery, a modest decline in energy exports of two per cent is anticipated for 2004, followed by a decrease of 11 per cent in 2005.
Forestry exports are projected to increase by 12 per cent in 2004 and another five per cent in 2005, bouncing back from a 3.1 per cent decrease in 2003 triggered by the strong Canadian dollar, industry oversupply and the softwood lumber dispute. Supply management in lumber will stimulate a rise in prices, and renewed spending on advertising will increase sales of newsprint. Buoyant pulp exports round out the positive industry outlook as demand from the U.S., Europe and Asia remains strong.
Agri-food exports will rise by three per cent in 2004 and a further five per cent in 2005. The industry forecast remains modest as a mixed performance is anticipated from exports of fish and fish products, which account for nearly two thirds of total exports. However, there is a positive risk to the forecast as a greater than expected increase in the total allowable catch for crab could be a possibility.
Industrial goods are projected to show the most significant export gains, benefiting from increased demand from south of the border, rising 12 per cent in 2004, and a further six per cent in 2005.
Exports from New Brunswick increased 4.1 per cent in 2003 to $8.5 billion. Energy accounted for the largest share of exports in 2003 at $3.9 billion, followed by forestry at $2.3 billion and agri-food at $1.3 billion. Industrial goods exports totalled $591 million. The U.S. was by far New Brunswick’s largest customer in 2003, buying $7.6 billion of exports, followed by the European Union at $211 million and Japan at $145 million.
Nationally, the Canadian economy is expected to grow by three per cent in 2004 and by 3.3 per cent in 2005. Export sales should increase by six per cent this year and by two per cent next year.
A copy of EDC’s semi-annual Global Export Forecast is available on EDC’s web site: (http://www.edc.ca/docs/ereports/gef/EFindex_e.htm)
EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates as a commercial financial institution.
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