OTTAWA, June 18, 2014 /CNW/ - While the Canadian aerospace industry
experienced mixed results in 2013, rising global aircraft demand should
lead to strong growth in the years to come, according to The Conference
Board of Canada's Spring 2014 outlook.
"A cyclical upturn in the global aerospace industry has led to an order
book that stretches to almost three years of production — a record for
the Canadian industry," said Michael Shaw, Economist. "As these
unfilled orders translate into production, the industry will enter a
period of solid growth."
The order backlog for Canadian aircraft manufacturers is now equivalent
to 33 months of production, a record for the industry.
The Canadian industry's medium- and long-term success will hinge on its
ability to capitalize on demand for fuel-efficient aircraft.
Airlines in developed markets are retiring their older, less
fuel-efficient aircraft and carriers in emerging countries are
increasing their fleets, adding to long-term demand for new production.
Low-cost carriers are expected to lead growth in the sector.
The Canadian industry's success will hinge on its ability to capitalize
on demand growth. Single-aisle airplanes are a potential opportunity.
Bombardier's CSeries is intended to capture some of this market.
Another trend in the industry is consolidation and integration of supply
chains among manufacturers to control costs. Canadian suppliers, many
of them smaller firms, will have to be able to upgrade their
capabilities to work with major manufacturers.
Industry production is expected to grow by 6 per cent this year.
However, increasing costs have tightened profit margins and restrained
profit growth. Industry profits are forecast to reach $787 million in
2014, and will not exceed $1 billion until 2017, when profit margins
reach 5 per cent.
SOURCE: Conference Board of Canada
For further information:
Yvonne Squires, Media Relations, Tel.: 613- 526-3090 ext. 221