OTTAWA, June 14 /CNW Telbec/ - Hard-hit by the economic downturn, Canada's computer and electronic product manufacturing industry is on a slow path back to its pre-recession performance, according to The Conference Board of Canada's Spring 2010 outlook on the industry.
"Last year, the industry experienced its first decline in profit levels since the tech bust at the beginning of the 21st century," said Maxim Armstrong, Economist. "Profits are expected to dip again this year, before a more sustained recovery takes hold beginning in 2011."
Tumbling demand in foreign markets - particularly the United States - reduced industry exports by 16 per cent in 2009. Combined with a dropoff in domestic sales, industry revenues fell by more than 10 per cent last year. Manufacturers cut costs in response - notably by eliminating 20,000 jobs in the 12 months between the fourth quarter of 2008 and the third quarter of 2009. Profits fell to $1.7 billion in 2009, a 17 per cent drop from 2008 levels.
In 2010, production is expected to rebound modestly as demand improves and excess inventory is moved. However, costs are forecast to grow faster than revenues, leading to a further reduction in profits, to $1.4 billion. In 2011, healthier corporate profitability and consumer confidence are expected to lead to a strong rebound in production and a return to profit growth.
SOURCE Conference Board of Canada
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