N.B. Needs More Companies that Export Goods, Says Analyst
HALIFAX – The number of companies in New Brunswick that export goods has fallen since 2010, according to the latest Report Card from the Atlantic Provinces Economic Council (APEC).
In 2010, 766 businesses in the province exported goods, according to APEC, but that number fell to 726 in 2016. Newfoundland and Labrador also experienced a drop in the number of exporters.
“Increasing the number of firms that export is important, but accelerating the growth of existing exporters also needs consideration,” said Fred Bergman, APEC’s senior policy analyst, in a release. “As it stands, large exporters in Atlantic Canada – those employing more than 100 people – accounted for almost three-quarters of the region’s merchandise exports last year, while they comprise 11 percent of exporting firms.”
Nova Scotia and Prince Edward Island were the only ones that grew the number of companies that export goods.
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The Report Card states that doubling the number of exporters with fewer than 50 employees would increase Atlantic exports by about 18 percent, but doubling the number of exporters employing more than 100 people would increase total exports by 74 percent. Larger exporters are also more likely to be able to afford the costs of expanding into new markets. About 73
Larger exporters are also more likely to be able to afford the costs of expanding into new markets, according to APEC. About 73 percent of Atlantic exporters send goods to only one market, which Bergman said has a negative impact on the overall value of sales.
Firms that export to more than one international market have average sales of $23 million,” said Bergman. “Those who export to one market average $3.5 million.”
The U.S. was by far the most popular destination for exporters in the Maritimes, but exporters in Newfoundland and Labrador are more diversified, with 55 percent selling to the U.S. and 42 percent selling to markets in Europe.
The Report Card notes that Atlantic exporters are shifting their focus to Asia, with 20 percent more firms selling there last year than in 2010.
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However, the proportion of Atlantic firms selling to Asia, at 16.5 percent in 2016, is below the 19 percent national rate. And despite the prospects of the trade agreement with the EU that came into force last month, the number of Atlantic exporters selling to Europe has fallen by 12 percent since 2010, compared to a 1 percent decline nationally.
“Previous APEC research has shown that successful exporters are differentiating themselves through their innovative technology, specialized competencies or superior quality of their products or services,” said Bergman. “So it’s important that export development programs pay sufficient attention to the market strategy and competitiveness of the firms they are looking to assist.”
Export opportunities for Atlantic Canada will be a key focus of APEC’s business Outlook conference in early November.