(MONCTON) November 28, 2007 New Brunswick's exports are forecast to grow at a steady rate of 5 per cent in 2007 and 5.7 per cent in 2008, according to a provincial export outlook by Export Development Canada (EDC).
"After declining 3 per cent last year, New Brunswick's exports are geared toward growth in 2007 and modest acceleration in 2008, with greater energy, pulp, paper and fertilizer exports offsetting the collapse of lumber shipments," said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist.
The energy sector accounts for 57.8 per cent of the province's export picture. EDC expects energy exports to expand 5.5 per cent in 2007 with greater volume from the Irving Oil refinery. Additionally, the province started shipping natural gas this year, with Corridor Resources connecting the McCully natural gas field to the Maritimes & Northeast pipeline. With the Irving Canaport LNG terminal expected to start operating in late 2008, natural gas exports are expected to surge, boosting growth in total energy exports to 12.2 per cent in 2008 despite softer US demand for refined petroleum products. Electricity exports, however, will contract in 2007 and again in 2008 as a result of shutdowns at the Point Lepreau nuclear power plant, whose refitting is due to be completed late in 2009.
The forestry sector represents 20.2 per cent of the province's exports. Wood product exports have declined significantly this year, faster than in most other provinces. The collapse of the US housing market has resulted in a sharp contraction in lumber demand, causing a number of shutdowns and curtailments in the province. As a consequence, wood product exports will fall 35 per cent in 2007 before rising by 7 per cent in 2008 as supply management and a softer Canadian dollar support better prices. Driven by strong market fundamentals, higher prices and capacity expansion in Edmundston and Nackawic, pulp exports are forecast to expand 26 per cent in 2007 and another 7 per cent in 2008. However, the increase in paper exports so far this year is largely related to the 3-month closure of the Miramichi mill early in 2006. The company recently began a 9-month shutdown due to weak market conditions, and EDC expects the mill to remain closed for much of 2008, resulting in paper exports contracting 23 per cent in 2008 after expanding 12 per cent this year.
Nationally, Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007, and 2.6 per cent in 2008. Key price gains in commodities have put Canadian exports on track to increase by 3.7 per cent in 2007, but the impact of weaker U.S. and global demand will have the export growth rate more than halved to 1.5 per cent in 2008. Internationally, EDC is forecasting a 4.9 per cent growth rate in 2007, and 4.5 per cent in 2008. EDC's Global Export Forecast is available at http://www.edc.ca/gef.
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 6,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and is a recognized leader in financial reporting, economic analysis and has been recognized as one of Canada's Top 100 Employers for seven consecutive years.
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Media contact: Phil TaylorEDC Public Affairs(613) 598-2904ptaylor@edc.ca
