OTTAWA, June 17, 2013 /CNW/ - The long-term outlook for Canada's oil and
gas support activities industry is threatened by the North America-wide
debate over new pipeline construction, according to The Conference
Board of Canada's Canadian Industrial Profile-Spring 2013.
This increased uncertainty could have negative effects across the
economy, since the support industry is as big an employer as the oil
and gas extraction sector itself.
"Investment intentions in the Canadian oil sands remain strong, which
bodes well for the support industry's short-term outlook," said Michael Burt, Director, Industrial Economic Trends, The Conference Board of Canada.
"However, the uncertainty over the Keystone XL and Northern Gateway
projects could lead companies to pull back on their medium and
long-term investment plans and limit future demand for support
In 2013, overall activity in the support services industry is expected
to diminish for the second straight year. Lingering weakness in natural
gas prices continues to suppress drilling activity, and conventional
oil extraction is expected to level off this year after two years of
Nevertheless, industry profits are forecast to rise to $250 million in
2013 thanks to solid growth in prices.
The oil and gas support activities industry employed almost 112,000 in
2012, compared with 113,000 for the oil and gas extraction industry.
Investment intentions in the Canadian oil sands remain strong.
Professional services continues to benefit from healthy corporate
profitability, numerous mergers and acquisitions, information
technology changes and demand from the oil patch for services.
The Oil and Gas Support Activity Industry is one of six industries covered in the Canadian Industrial Profile - Spring 2013. Published by The Conference Board of Canada and the Business
Development Bank of Canada, the Spring outlook also examines:
Professional Services - Increased corporate profitability and strong oil sands investment are
driving demand for many professional services - such as legal,
accounting, and engineering services. Industry profitability is
expected to rise above $13 billion this year.
Textiles and Apparel - Production in the textiles and apparel industry continues on a
long-term downward trajectory. Heavy international competition and weak
sales will continue to limit industry profit margins—averaging less
than 2 per cent over the five-year forecast period.
Electrical Equipment - Industry output is expected to decline for a second consecutive year,
due to weak demand for electrical equipment, both at home and abroad.
Production is expected to increase in 2014, but only moderate growth of
2 per cent per year is expected through the next four years.
Fabricated Metal Products - These products are primarily used by other manufacturing industries,
such as motor vehicles and aerospace, so the optimistic outlooks for
both these industries is a positive signal for fabricated metal
Machinery Manufacturing - After three years of strong growth, industry output is expected to
suffer a setback in 2013, due in large part to impact of global
economic uncertainty on commodity prices.
SOURCE: Conference Board of Canada
For further information:
Brent Dowdall, Media Relations
Tel.: 613- 526-3090 ext. 448
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