New Brunswick's international export growth is forecast to lead the country in 2010, according to a provincial export outlook by Export Development Canada (EDC).
"New Brunswick will take national top honors in 2010 with 19 percent export growth, based upon modest improvements in energy and forestry prices, which will be bolstered by a full year of production and exports out of the LNG plant," said Peter Hall, Chief Economist, EDC.
The energy sector dominates the provincial export picture by accounting for nearly 68 percent of New Brunswick's exports. The positive effects of the long-awaited Canaport LNG terminal will play an important part in boosting the province's 2010 energy export numbers. The longer-term outlook for the sector will suffer due to the shelving of plans for a second oil refinery in St. John.
"While 2009 was a very tough year with energy exports estimated to have fallen 36 percent, fortunes will reverse in 2010 as LNG operations are in full swing, the Point Lepreau nuclear power plant is back online, and prices and demand for refined petroleum improve," said Hall. "The combined effect should boost energy exports 28 percent in 2010, driving the province's country leading performance."
The second largest export sector is forestry, accounting for 11 percent of the province's total. EDC predicts that forestry product exports will fall 17 percent in 2009, and rise by an uninspired 4 percent in 2010 as U.S. housing starts slowly begin to improve.
"Record-low U.S. housing starts have been the major culprit behind weakness in forestry exports, and we're still a year away from feeling any improvement there," said Hall.
Adding to the sector's troubles has been the black liquor tax credit given to U.S. pulp producing mills. Almost half of the province's sawmills have either permanently or temporarily shutdown, and the pulp and paper industry is staring down a similar fate. On the positive side, AV Cell and AV Nackawick remain resilient, mainly because they specialize in dissolving pulp and remain somewhat shielded from the ups and downs of the open market.
Canadian exports are forecast to contract 23 percent in 2009 before rebounding 6 percent in 2010. Nationally, economic growth is expected to fall by 2.3 percent in 2009 with an upturn to 1.9 percent in 2010. Internationally, EDC is forecasting a decline of 1.3 percent in 2009 and 2.9 percent growth in 2010. 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 more than 8,300 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been named one of Canada's Top 100 Employers for nine consecutive years.