NB leads in manufacturing decline

This is not something you want to see.  New Brunswick had the steepest decline in manufacturing sales in November 2007:

Every province reported decreased manufacturing sales in November, ranging from a 0.3% decline in Saskatchewan to a 31.5% drop in New Brunswick. In the Atlantic provinces as a whole, manufacturing sales were down 21.7%, reflecting a sizeable decline in petroleum product prices.

The good news here is that a drop in petroleum prices doesn’t impact government revenue in New Brunswick virtually at all (someone can confirm if there is something I don’t know) and as far as I know the cost that Irving charges to refine oil into gas doesn’t change much depending on the price of crude.  It costs x to refine it regardless of the price of the crude.

So, if we had a 31.5% decline mainly because of forest product manufacturing decline it would be a much more dangerous issue.

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4 Responses to NB leads in manufacturing decline

  1. Rob says:

    HST revenue from petroleum sales has been impacted by the drop in fuel costs. 14% of $1.50/L is much greater than 14% of $.75/L.

    I have no idea what quantity of fuel is sold in NB, so I can’t say what impact the drop in HST revenue has had on our coffers.

  2. Good point. I was thinking about the refining side but certainly on the consumption side there will be a considerable hit.

  3. Rob says:

    Quick back of napkin calcs say that with appx 1.5 billion L of fuel sold in NB in one year (http://www40.statcan.gc.ca/l01/cst01/trade37a-eng.htm), a drop of fuel price of 0.01/L costs the NB gov’t $100,000/month of HST revenue. That’s with 8% HST revenue directed to the province. It’s not that simple, but it’s a start.

    So, the roughly 70c/L drop since September has cost us ~$7M/month. We would have collected an extra 30 million bucks had the price of fuel not dropped. That’s a new school and change.

  4. Anonymous says:

    If Potatoes business is going to improve in N.B.,new chairperson Joe Brennan should be the man,but his long interview still didn’t seem to be concerned with me having to buy decent product from either PEI or the Americans.
    At $129 per hundred weight?

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