Lower energy prices will leave overall export growth in Nova Scotia almost unchanged at two per cent in 2004 and 2005, according to a provincial export outlook from Export Development Canada (EDC).
However, the agri-food, forestry and industrial goods sectors are expected to show considereable growth.
Agri-food exports are expected to rise two per cent in 2004 and four per cent in 2005, after declining 2.7 per cent in 2003. Crab prices and volumes are expected to rise above levels seen in 2003, with gains to the latter likely to have a positive impact on the outlook. Prices for lobster and other seafood should remain stable, with some possible downward pressure because of the lingering effects of the stronger Canadian dollar. The overall outlook for the agri-food industry is positive and in line with assumptions about emerging U.S. job growth, as well as a pick-up in the Japanese economy.
Forestry exports are expected to rebound this year and in 2005, posting significant gains of 14 per cent and nine per cent respectively, reversing a 10.2 per cent decline in 2003. The positive export gains are due to projected price increases and greater demand for lumber, newsprint and pulp. While improvements to lumber supply management and high U.S. construction activity will likely raise prices, the softwood lumber dispute remains a risk factor and the projected strength of the Canadian dollar will continue to bite into price gains. Meanwhile, increases in newspaper advertising and additional capacity in the industry will also cause print prices to rise in 2004 and 2005. Pulp exports are also expected to rise as growing U.S. demand adds to existing Asian momentum, which will likely also see prices rise throughout the year and then slow in 2005 as global inventories reach comfortable levels.
Exports of industrial goods are expected to rise eight per cent in 2004 and a further five per cent in 2005 after declining 14.5 per cent in 2003. This increase is in line with the respectable pace of U.S. and global economic growth and the corresponding rise in industrial and consumer demand.
Most of Nova Scotia’s automotive exports are tires sold to the U.S. While no growth is projected this year, one per cent growth is expected in 2005 as U.S. consumer demand picks up and contributes to the stabilization in the automotive sector following last year’s drop.
Exports from Nova Scotia increased 2.5 per cent in 2003 to $5.4 billion. Agri-food accounted for the largest share of exports in 2003 at $1.4 billion, followed by energy exports at $1.3 billion and forestry exports at $925 million. Motor vehicle exports totalled $780 million and industrial goods $454 million. The U.S. was Nova Scotia’s largest customer in 2003, buying $4.370 billion of the province’s exports followed by Europe at $323 million and Japan at $158 million.
Nationally, the Canadian economy is expected to grow by three per cent in 2004 and by 3.3 per cent in 2005. Export sales should increase by six per cent in 2004 and by two per cent in 2005.
A copy of EDC’s semi-annual Global Export Forecast is available on EDC’s web site: (http://www.edc.ca/docs/ereports/gef/EFindex_e.htm)
EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates as a commercial financial institution.