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By STEPHEN LLEWELLYN
llewellyn.stephen@dailygleaner.com

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The New Brunswick economy should see 1.4 per cent growth next year, including better prices for minerals, forestry and fisheries, says a new report from the Atlantic Provinces Economic Council.

It's the lowest growth rate, however, in the region, the council said.

"New Brunswick is looking at real economic growth, turning positive after a slight decline this year," said Fred Bergman, senior policy analyst for the council, on Monday. "There is an expected turnaround in the economy."

The council released its annual report on the economy in Atlantic Canada on Monday.

Newfoundland is expected to lead the region with three per cent growth followed by Nova Scotia at 1.7 per cent and then Prince Edward Island at 1.5 per cent.

The New Brunswick economy fell 1.1 per cent in 2009.

Zinc exports fell 35 per cent and potash shipments were down 50 per cent in 2009. Manufacturing has declined 27 per cent so far this year.

Employment was flat in 2009 and retail sales fell one per cent, said the council. Motor vehicle sales fell nine per cent, and while housing prices rose six per cent, new home construction dropped 24 per cent.

"This was the year in which we saw some of the large-scale projects wind down in New Brunswick," said Bergman.

"We are expecting next year for commodity prices to continue to rebound. We have already seen oil prices, for example, bounce back this year."

In 2010, the council cited capital spending of $1.7 billion for the new potash mine in Sussex and $700 million for a new solar cell plant in Miramichi, and refurbishment work on the Point Lepreau nuclear power plant will continue.

Bergman said the recovery in 2010 is partially linked to a recovery in the United States and the rest of the world. But some of it is linked to the federal and provincial stimulus spending, he said.

"Once that stimulus unwinds over the next two to three years, there is always the risk that if the private sector does not step up and start driving the economy again then things could wane," he said.

Another risk is if the Bank of Canada raises the interest rate too quickly if the economy recovers rapidly, he said. But he said he didn't expect to see interest rates go up substantially this year.

Bergman said the proposed deal to sell NB Power to Hydro-Quebec was announced after the council's report was written.

He said there are short-term benefits to the deal, but there are questions about the long-term benefit.

Finance Minister Greg Byrne said the council's forecast of 1.4 per cent is positive news and in line with the provincial economic prediction.

"There has been a slowdown in the economy, but it has been picking up," he said. "We are seeing the benefits of the major capital stimulus as well."

Byrne said improvements to mining, forestry and fisheries sectors are critical to New Brunswick's economic wellbeing.

"The forest sector has been under siege," he said. "There is still going to be a challenge with the strength of the Canadian dollar."