MONTREAL—The Conference Board of Canada says a slowdown in new aircraft orders and global economic uncertainty will depress Canadian aerospace manufacturing profits this year and next.
The think-tank expects industry profits will decline 30 per cent by the end of 2013 from the recent high of $710-million set in 2010.
Conference Board’s senior economist Maxim Armstrong says the industry is still coping with the lingering effects of the 2008 recession.
While recent new orders indicate signs of recovery, financial turmoil in Europe is creating uncertainty and making the comeback difficult, he said in the board’s latest edition of its Industrial Outlook.
Armstrong says modest growth in global demand for air transportation is delaying the need to expand capacity or to replace existing aircraft.
Conditions are expected to progressively improve towards the end of its five-year forecast.
U.S. economic growth remains slow but an improvement in the financial position of American companies should lead to increased demand for business jet, says the Conference Board.
The improved outlook in 2015 and beyond coincides with the impact of Bombardier’s CSeries commercial jet.
The smaller version of the plane is slated to enter into service in June 2014, followed by the more popular larger model by the end of that year.