OTTAWA, June 21, 2013 /CNW/ - Demand for new aircraft appears to be on
the rise, which will provide a boost to Canadian production over the
next four years, according to The Conference Board of Canada's Industrial Outlook: Canada's Aerospace Industry-Spring 2013.
"Demand has been soft for years, due to the uncertainty in the world
economy. But the new-order books are starting to look better, partially
the result of rising orders for the CSeries, Bombardier's upcoming
aircraft, and renewed strength in the demand for high-end business
jets," said Maxim Armstrong, Senior Economist. "It will take years for
the industry to fully benefit, but production is beginning to
The modest pace of global economic activity has limited demand for air
cargo or passenger services. Furthermore, the inventory for used
aircraft remains high, which weakens demand for new production.
A few large orders last year and accumulating orders for Bombardier's
CSeries have improved the Canadian industry's order book. However, most
orders are spread over a long period of time, so the short-term impact
High oil prices can help aerospace manufacturers promote new, more
fuel-efficient aircraft. But low oil prices can reduce pressure on
buyers to renew their fleets.
As of April, the industry's backlog of orders had reached $38.5 billion,
surpassing its pre-recession peak. However, these orders will have a
modest effect on overall production in the short term. Annual
production is not expected to increase until next year, and the
industry will not exceed its 2008 production levels before 2017.
Industry revenues can be very volatile depending on when aircraft are
shipped and the industry's recent performance is no exception. Despite
the improving order book, sales actually dropped 0.5 per cent in 2012
as shipments fell in the closing months of the year.
Sales declined again in the first few months of this year. As a result
of the weak start to the year, 2013 will see a second consecutive year
of declining revenues. However, sales will begin to improve in 2014, as
the CSeries moves into production and deliveries of other aircraft
SOURCE: Conference Board of Canada
For further information:
Françoise Makanda, Media Relations, Tel.: 613- 526-3090 ext. 389
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