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Recovery on the way for key manufacturing industries, says new report

MP&P Staff
September 07, 2010
By MP&P Staff
Production in several hard-hit Canadian manufacturing industries is expected to improve in 2010. It will, however, take until 2011 for some industries to experience an increase in profits or to emerge from the red, according to the Canadian Industrial Profile-Summer 2010, published by The Conference Board of Canada in collaboration with Business Development Bank of Canada (BDC).
The Summer edition of the service provides a five-year (2010-2014) production, revenue, cost and profitability forecast for six Canadian industries:
Aerospace Products  
Motor Vehicle Parts
Furniture Products Manufacturing
Paper Products Manufacturing
Printing Services
Wood Products Manufacturing

"Some of the manufacturing industries analyzed in this report faced declining production before the recession, and the downturn only made matters worse," said Michael Burt, Associate Director, Industrial Economic Trends. "Not every industry is at the same point in their recoveries, but improved profitability can be expected as demand grows and the cost-cutting implemented during the recession starts to help the bottom line."

For instance, in the aerospace industry, production slowed abruptly in the second half of 2009, and is expected to weaken again in 2010. As a result, industry profits are forecast to decline by 35 per cent to $269 million this year. The good news is that demand seems to be picking up, which bodes well for the industry's performance over the next four years.

And in the motor vehicle parts industry, parts-makers are expected to lose money for the third consecutive year in 2010, but a projected loss of $41 million is much smaller than those incurred the previous two years. U.S. vehicle demand is gradually recovering and cost-cutting measures implemented during the recession are improving the bottom line - to the extent that the industry is expected to be profitable in 2011.

The Canadian Industrial Profile Service is part of The Conference Board of Canada's Industrial Economic Trends research. In all, outlooks for 23 industries are completed each year. The publications are available at BDC clients can receive a copy of the profiles free of charge through their BDC account manager.

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