MONCTON, NEW BRUNSWICK--(Marketwired - May 29, 2014) - After a slight dip in 2013, New Brunswick exports are forecast to increase by a moderate 3 per cent this year and next, according to a new forecast by Export Development Canada.
The rapid revival in U.S. homebuilding is bringing explosive growth to New Brunswick's forestry sector. After languishing for years, the forecast calls for a 14 per cent surge in exports this year, which is expected to be followed by 8 per cent growth in 2015.
Forestry exports have been given an additional push by a 20 per cent increase in the allowable cut and a looming shortage of lumber supply in British Columbia. Lumber shipments will account for the bulk of the growth as foreign demand for pulp and paper remains soft.
"The province needs more than a thriving forestry sector for long term export growth, however" noted Peter Hall, Chief Economist, EDC. "With 70 per cent of New Brunswick's exports tied to the energy sector, the province's international performance is tied to prices. As oil goes, so go New Brunswick exports, and prices will weaken."
"Looking further out, upcoming projects like the West-East pipeline and the plan to convert the Canaport LNG terminal into an export facility are potential game changers for the province's export picture for years to come."
New Brunswick is heavily dependent on the U.S. economy, with a full 90 per cent of its international exports heading for the U.S. market. The contribution of exports to the province's GDP is roughly 50 per cent, a considerable number from New Brunswick's 600 exporters.
Hall was in Moncton today at the Delta Beausejour to connect with a lunchtime crowd of local business leaders about trends in the global economy that could impact their international sales opportunities.
"New Brunswick's dependence on the U.S. has an upside now that the American economy is recovering and picking up steam," Hall added. "With housing starts soaring and both corporate investment and consumer spending set to jump, there are multiple direct benefits to the province's forestry, agri-food and mining sectors, especially in 2015."
Higher prices for seafood exports will drive the province's agri-food sector to growth of 3 per cent this year and next. The recently signed free trade agreements with South Korea and Europe will have a positive impact for this subsector in the medium- to long-term.
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 sales. It also analyzes a range of risks for which exporters should be prepared. Read EDC's Global Export Forecast.
EDC is Canada's export credit agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.
For more information about how EDC can help your company, visit www.edc.ca