New Brunswick export growth mirrors decline in oil and forestry, says EDC
MONCTON – November 29, 2006 – New Brunswick’s international exports are forecast to grow by 3 per cent in 2006 before declining by 3 per cent in 2007, according to a provincial export outlook by Export Development Canada (EDC). The province’s exports are dominated by the energy and forestry sectors, accounting for 60 per cent and 18 per cent of New Brunswick’s exports, respectively.“Following 2 consecutive years of double-digit growth, New Brunswick’s exports lost momentum in 2006 and are likely to decline in 2007, largely reflecting the expected decline in oil prices and forestry exports to the US,” said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. “Over 90 per cent of the province’s exports are destined for US markets, mainly the New England states, so the slowing US economy will have a significant impact on New Brunswick’s key commodity sectors.”
Exports of energy are expected to grow by 6 per cent in 2006 but decline 4 per cent next year, in line with expected lower prices for crude oil and refined petroleum products. The decline in prices is anticipated to be only mildly offset by the projected weaker Canadian dollar. For 2007, EDC is forecasting a 4 to 5 per cent depreciation in the Canadian dollar and an average of USD 55/barrel for crude oil.
The forestry sector showed little export growth in 2006, and export sales are expected to decline by 2 per cent in 2007. The continued decline in the US housing market will lead to more weakness in the wood products industry, where exports are anticipated to drop another 7 per cent in 2007. The pulp and paper industry will benefit from mild relief owing to the stabilizing Canadian dollar, but demand and prices are expected to follow the downward economic cycle..
Exports of agriculture and fishing products are down in 2006. Export sales have been affected by a number of factors, including a decline in potato production last year related to the pink blight disease, an 18 per cent drop in total allowable catches for snow crab and weaker prices for lobster. Agri-food exports are expected to post modest growth of around 2% in 2007.
Nationally, Canadian economic growth is forecast to remain stable at 2.8 per cent in 2006 and 2.4 per cent in 2007. Canadian exports are forecast to grow by 3 per cent in 2006 before declining by 1 per cent in 2007. Internationally, EDC is forecasting 4.8 per cent global economic growth in 2006 and 4.0 per cent growth in 2007. EDC’s Global Export Forecast is available at http://www.edc.ca/docs/ereports/gef/EFindex_e.htm.
Export Development Canada (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 7,000 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 human resource management.
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Media contact:
Phil Taylor
EDC Public Affairs
(613) 796-4368
ptaylor@edc.ca
