New Brunswick’s export growth modest through 2014, says EDC
Brazil tops the list of emerging market destinations, followed by China, India and Turkey.
Oil & Gas
Export Development Canada
global export forecast
MONCTON, NB – 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, predicts the province’s exports will grow by 4% in 2013 and 2% 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 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% in 2014 on gains from forestry, agri-food and industrial goods.”
Energy accounts for a dominant 72% of New Brunswick’s international exports. Hall predicts that provincial exports in this sector will grow by 4% 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 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% of the province’s total international sales. EDC’s forecast predicts the sector to grow by 9% this year and another 8% in 2014.
“Wood product exports will receive a major boost from positive momentum in US housing, with starts expected to rise nearly 34% this year and another 24% in 2014,” said Hall, who is bullish on the US economy. “Some previously closed mills have reopened, but capacity constraints are likely to limit the province’s ability to take full advantage of stronger US 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% 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 US 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% 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% in 2013 and 5 per cent in 2013, while economic growth (GDP) is expected to rise 2.2% this year and 1.9 next year. EDC is forecasting global growth of 3.6% in 2013 and 4.2% in 2014.
Click here to read EDC’s Global Export Forecast.
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.