Canadian Manufacturing

New orders give Canadian aerospace industry a boost—but not yet

Annual production not expected to increase until next year despite surge in orders

OTTAWA—Canada’s aerospace industry will see a boost in the near future thanks to an increase in new aircraft orders, according to a Conference Board of Canada report.

The think-tank’s Industrial Outlook: Canada’s Aerospace Industry-Spring 2013 says that, as of April, the industry’s backlog of orders had reached $38.5-billion, surpassing the pre-recession peak.

“Demand has been soft for years, due to the uncertainty in the world economy, (b)ut 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,” Conference Board senior economist Maxim Armstrong said in a statement.

However, the report warns 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.

“It will take years for the industry to fully benefit, but production is beginning to accelerate,” Armstrong said.

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, according to the report.

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 accelerate.

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