FREDERICTON, June 3, 2005 -- Propelled by stronger than anticipated energy prices, the value of New Brunswick's provincial exports, will jump by 8 per cent in 2005, well ahead of the provincial average growth rate of 5.3 per cent, according to an Export Development Canada (EDC) forecast. However, EDC anticipates a 7 per cent contraction in 2006 - the result of declining energy prices. "2005 is shaping up to be another strong year, adding nicely to the exceptional performance recorded in 2004, when exports from New Brunswick surged almost 11 per cent," said EDC Senior Vice-President and Chief Economist Stephen Poloz. "New Brunswick is still reaping the benefits of higher than previously anticipated energy prices." EDC cautions that the price of oil greatly affects its export forecast for New Brunswick, as energy accounts for almost half its exports. EDC expects the price of West Texas Intermediate (WTI) crude to average around USD 45 per barrel in 2005 before dropping to the high 30's range in 2006. Assuming little change in output from the Saint John refinery, EDC projects that these pricing forecasts will correspondingly affect the value of New Brunswick exports this year and in 2006. For its part, electricity, which makes up 3 to 4 per cent of the province's total energy exports, is expected to remain stable over the forecast period after dropping 20 per cent in 2004. In the forestry sector, lumber prices are expected to decline in 2005 and 2006 after hitting a 10-year high in 2004. As the US housing market cools and prices decline, the volume and value of lumber exports should also pull back. Mill closures have and will continue to affect the growth of pulp exports, even with prices expected to increase in 2005. In January 2005, a kraft pulp mill was shut down in Miramichi, while another paper mill is halting operations to upgrade existing equipment during 2005. "True, these factors will pull paper exports slightly downward through the coming year," noted Mr. Poloz, "but the upgrade will benefit future exports as it will lead to a higher value-added product." In 2004, a stronger Canadian dollar, an oversupply of raw potatoes and the impact of the Atkins' diet on per capita french fry consumption in the US all contributed to a 24 per cent decline in the exports of frozen potatoes. Since no large-scale reductions of output were announced in 2005, it appears that New Brunswick potatoes are finding new markets within Canada, as exports are continuing to fall despite steady production levels. New Brunswick now ranks fourth in potato exports, having recently been surpassed by Manitoba and Alberta. "Prolonged strength in fish product exports is in the forecast, as New Brunswick continues to build on the 3 per cent gain achieved in 2004," said Mr. Poloz. "We expect export growth to reach 2 to 3 per cent in 2005, followed by additional gains of 3 to 4 per cent in 2006." Crab exports were strong in 2004, having increased by over 40 per cent. Crab exports are expected to be robust again in 2005 as crab stocks in the gulf remain healthy and higher landings are anticipated. The price for crab has been negatively affected by an ongoing excess supply in the market and this is likely to continue, as supply could exceed demand later in 2005. Exports of salmon increased 9 per cent in 2004, a good number considering the impact of the higher Canadian dollar. It is expected that exports of salmon will continue to rise in 2005 and 2006.Nationally, the economy is expected to grow by 2.4 and 2.9 per cent in 2005 and 2006, based on good domestic economic fundamentals. In turn, Canada's export volumes should grow by 3 per cent in both 2005 and 2006.A copy of EDC's Global Export Forecast is available on EDC's web site: http://www.edc.ca/docs/ereports/gef/EFindex_e.htm EDC is a Crown corporation that provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets worldwide.-30-Media Contact : Glen NicholsEDC-Public AffairsTelephone: (613) 598-6829email: glnichols@edc.ca
