Incremental value of exports. Up by billions with a B!

Just a few points on the story in the TJ today about the rise in exports.  Almost all of the net growth comes from the oil refinery and as I point out while that is fine – the value of those incremental exports is not particularly high.  As David Chaundy points out it might be a price effect but even if it is increased output the economic value from another dollar of refined oil products is much less than, say, food manufacturing or forest products where you need a lot more jobs, more trucks on the road, etc.

I still have that image in my mind of Kirk Macdonald getting up in the Leg and proudly crowing about how under his watch  the value of New Brunswick exports were up by a “billion dollars and that’s billion with a b, Mr. Speaker”.  Of course, the Irving refinery had just finished its big expansion and exports from the rest of the economy were tanking but Kirk figured out the media wouldn’t notice or if they did the public wouldn’t understand anyway.

Billion with a b.

You will note that the total value of merchandise exports in 2012  -less the refinery – were actually down compared to a decade ago in 2003.  Instead of having a conversation about how that ties into our weak economic performance, we get stories about NB’s robust exports growth.

The silver lining here is that the monthly merchandise exports do not included services exports and that, in my opinion, holds a lot of potential.  Services exports are things like customer contact centres, IT, finance/insurance, engineering, etc. and there are pockets of export activity that we don’t talk about – I mean never.  It is rare for anyone in the media or government to talk about services exports although they are likely in the hundreds of millions of dollars per year.