But expect slow takeoff
OTTAWA: Canada’s aerospace industry will soar above its pre-recession peak by 2014, according to the Conference Board of Canada.
Michael Burt, the board’s associate director of industrial economic trends, said stronger market conditions for commercial jets are bringing new orders in for industry, “albeit at a modest pace.” Growth will stay modest for the next couple of years.
He made the comments in the Board’s “Canadian Industrial Outlook: Canada’s Aerospace Product Manufacturing Industry – Autumn 2010.”
Profits are rebounding on a quarter-over-quarter basis, although they remain below 2009 levels.
As order books gradually expand and inventories of existing aircraft are sold, production will pick up in 2011.
The report forecast a $308-million profit in 2011, although margins will stay thin as most of the industry’s products are sold in US dollars, and the continued strong Canadian dollar detracts from industry pricing and profitability.
Some companies are already seeing signs of the sector’s rebound.
“We’re seeing our aero customers are doing better and they’re making money; even Air Canada is making money,” said Barry Eccelston, president & CEO Airbus Americas Inc, speaking at the recent Ontario Aerospace Council Annual General Meeting in North Toronto.
“Orders are coming from Asia, India, Middle East…all these guys are continuing their growth and ordering aeroplanes,” he said.
He added, however, that the recovery won’t be without challenges from producers in India, Russia and especially China.
With files from Mary Scianna-Briggs.