Prediction New Brunswick will rise next year to No. 1 in national exports, from No. 4
New Brunswick will lead the country next year in exports with eight per cent growth overall in spite of a global economic slowdown that will continue to affect primary industries, Export Development Canada predicted Friday.
Peter Hall, Economic Development Canada's vice-president and chief economist, forecasts New Brunswick will lead Canada's export growth in 2009 by gaining eight per cent in international exports, largely thanks to the Canaport liquefied gas terminal coming online
Energy exports will dominate the province's output, increasing by nine per cent in 2009 due to growth in that sector, despite a predicted continuing fall in energy prices.
Next year's growth in energy - while far surpassing other energy-producing provinces in expansion - will be less than the sector's surging growth in 2008, the national credit agency forecasted in its provincial export outlook.
Export Development Canada predicted New Brunswick's energy sector will have grown by 45 per cent on this year's high average U.S. gasoline prices, adding 26 per cent to overall exports.
In 2009, the Canaport liquefied natural gas terminal should come online in the first quarter of the year, adding $2.5 billion to exports.
And the McCully natural gas field will contribute additional capacity while electricity production at the Point Lepreau nuclear plant will stabilize.
"The energy sector as a whole is very dominant," said Peter Hall, Export Development Canada's chief economist and vice-president.
But the price of gasoline is now tumbling while demand for oil worldwide erodes as the global economy takes a hit, which will reduce revenue from New Brunswick's exports.
The price of gasoline fell to roughly US$2.152 a gallon Friday morning, nearly US$2 below its peak price in July, according to auto club AAA, the Oil Price Information Service and Wright Express.
Light, sweet crude for December delivery fell US$1.20 to US$57.04 a barrel on the New York Mercantile Exchange Friday.
Tim Curry, president of the Atlantica Centre for Energy, an industry association, said the LNG terminal will make up somewhat for lost revenues from low gas prices with an increase in sheer volume of exports.
"I would expect to see New Brunswick energy exports soften as the value for the output of the existing refinery gets priced in today's terms as opposed to the terms of six months ago, but there's a whack of LNG that's going to get re-gasified and put into a pipeline and shipped to the United States," Curry said.
Hall's predicts that New Brunswick will rise next year to No. 1 in exports nationally from its projected No. 4 position in 2008 behind Saskatchewan, Alberta and Newfoundland and Labrador.
This come as the Conference Board of Canada forecasted Thursday more than 3,000 job losses next year in N.B. due to the end of megaprojects in construction, a decline in building of new homes and weak U.S. demand for exports in forestry, mining and manufacturing.
Hall said his findings are based on projected increases in exports thanks to a low Canadian dollar, which he predicts will have dropped by 20 per cent on a year-over-year basis, "money that goes to the bottom lines of exporters in New Brunswick.
"If you take that price effect away, there actually is a decline in non-energy exports going forward."
Nearly 90 per cent of New Brunswick's non-energy exports go to the United States.
Wood product exports will see limited gains in 2009, Hall said, though he expects new home sales south of the border - the main market for wood products - to reach one million next year.
Mount Allison University economist Frank Strain said the forestry sector has already felt the worst from a poor U.S. housing market.
"The bottom dropped out of the housing market really, almost two years now, so we already had the impact of the recession before anyone else," Strain said.
Paper exports, after declining in 2008, will expand again next year, Export Development Canada said.
Pulp exports, which expanded during most of 2008 from tight global markets and three mill expansions, will deteriorate next year.
"Pulp is closely linked to advertising, newsprint, and paper in general. What happens in recessions is advertising is reduced in newspapers and there are less flyers going out," Strain said, adding that regardless of the direct end product for New Brunswick's pulp, low demand thanks to recessionary activity means all pulp producers will feel a slow-down in demand.
Published Saturday November 15th, 2008 - Telegraph Journal