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(Halifax) – November 6, 2014
Nova Scotia’s overall exports are projected to increase by a sky-high 35 per cent this year, the most growth of any province, according to Export Development Canada’s recent economic forecast.
This growth is expected to temper in 2015 to a more modest 3 per cent, but still from a much higher base.
The big jump in 2014 stems from a strong performance in the province’s offshore natural gas activity, as the industry benefited from three key trends: a full-year’s production at Deep Panuke, the resolution of output problems at Sable, and a weaker Canadian dollar.
“The result of these trends converged to unleash a staggering jump in the value of natural gas shipments this year,” said EDC Chief Economist Peter Hall.
He noted that in 2013, the energy sector was a minor export player in the province, with CAD 137 million in foreign sales, But 2014 is a different story, as exports in energy are expected to shoot to over CAD 1 billion, mostly due to natural gas production.
“This is a one-year phenomenon and energy exports will plateau in 2015, but at a high level,” said Hall. “Nova Scotia exporters are having a strong year in more than just natural gas. The seafood and forestry sectors are also doing well.”
The agri-food sector will see a 25-per-cent gain in exports this year, primarily because of the weaker loonie and stronger prices for live lobster. With less of a currency effect in 2015, exports in the sector are still expected to see 6 per cent growth.
Nova Scotia’s other major export industry, forestry, is benefiting from high demand south of the border as the U.S. housing sector rebounds. Forestry exports are projected to rise by 13 per cent in 2014, and by a slightly lower 8 per cent in 2015, as capacity restraints limit the potential for growth.
Although a smaller industry in terms of exports, Nova Scotia’s motor vehicles and parts sector will see a sharp drop in exports of 24 per cent in 2015, as Michelin pulls back production of tires for passenger vehicles and ramps up production of truck tires. Hall noted another aspect of Nova Scotia’s export success is the way producers have diversified, shipping an increasing amount of product to China.
“China’s growing middle class is the next hot market and they are hungry for high value food, including seafood,” explained Hall. “While the U.S. remains Nova Scotia’s top foreign market, China is now number two in terms of foreign sales, growing by a whopping 260 per cent between 2009 and 2013.”
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.
Export Development Canada