Download Construction and manufacturing Industries 2011

Canadian Occupational Projection
System
Industrial Summaries – Construction
and manufacturing Industries 20112020
Labour Market Research and Forecasting
Policy Research Directorate
Strategic Policy and Research Branch
Construction (NAICS 2361-2362; 2371-2379; 2381-2389)
This industry comprises establishments primarily engaged in constructing, repairing and renovating
buildings and engineering works, and in subdividing and developing land. It is composed of three
segments: construction of residential and non-residential buildings (commercial and industrial); heavy
and civil engineering construction (such as highways, bridges and dams); and specialty trade
contractors (such as masonry, painting and electrical work). Construction activities are domesticoriented and particularly sensitive to the business cycle, financial conditions and demographic trends.
The industry employed 1.2 million workers in 2010 (7.1% of total employment in the economy),
with 60% in specialty trade contractors, 29% in residential and non-residential construction, and
11% in heavy and civil engineering construction. The workforce is characterized by a significant
concentration of self-employed, accounting for 30% of all workers. Major occupations include:
managers in construction and transportation (NOC 071); contractors and supervisors, trades and
related workers (NOC 721); carpenters and cabinetmakers (NOC 727); and trades helpers and
labourers (NOC 761).
The industry has been an important driver of Real GDP and Employment Growth Rates
growth in total GDP and employment between in Construction
the start of the last decade through the onset of (%, annual average)
2001-2010
2011-2020
the latest recession. From 2000 to 2008, 5
production grew at an annual average rate of 4
4.8%, the second best performance among all 3
industries, while 424,000 new jobs were created. 2
This impressive performance was propelled by a 1
sizeable increase in new housing construction 0
and renovations and by a large increase in
Real GDP
Employment
capital spending in non-residential structures, Sources: Statistics Canada (historical) and HRSDC 2011
particularly in the energy sector for the COPS industrial scenario (projections).
development of the oil sands in Alberta. In
2009, the industry GDP and employment have been severely impacted by the recession as
residential and non-residential investment fell sharply, down by 8% and 20%, respectively. As
the economic recovery unfolded, the industry rebounded strongly in 2010 spurred by mortgage
rates at all-time lows, the Federal and Quebec Home Renovation Tax credit, and the
infrastructure program of the Federal Economic Action Plan. On average, real GDP in the
construction industry grew at an annual rate of 3.6% in the last ten years, while employment grew
at a faster pace of 4.2% annually.
Over the next decade, GDP growth in the construction industry is projected to slow considerably
due to a slower increase in residential investment, particularly in new housing where higher
interest rates will put downward pressure on demand for new homes. The formation of new
households, which is expected to decline gradually over the next decade due to demographic
changes, is the key factor that will affect housing demand, and thus, investment in new housing.
Population aging is also expected to lead to a shift in the composition of housing starts from
single- to multiple-dwellings, which require less investment per unit of housing. Furthermore,
slower growth in total labour force and employment is expected to restrain the demand for new
office space from businesses, and thus, investment in non-residential structures. On the other
hand, faster investment growth in non-residential structures within the mining and energy sector,
where growing demand has prompted the undertaking of numerous projects, will help support
activity and job creation in the construction industry. As a result, growth in both real GDP and
employment are projected to slow to an average annual rate of 1.7% and 1.4%, respectively.
1
Food and Beverage Products (NAICS 3111-3119; 3121; 3122)
This industry comprises establishments primarily engaged in manufacturing food as well as beverage
and tobacco products. Food manufacturing is by far the most important segment, accounting for 81% of
production in 2010, followed by beverage products (17%) and tobacco products (2%). The industry is
highly domestic-oriented as less than one quarter of its production is exported to foreign markets. With
a total of 273,500 workers in 2010, it is the largest employer of the manufacturing sector (15.7% of all
manufacturing workers). Most workers are operating in food manufacturing (89%) and employment in
the industry is largely concentrated in Ontario (38%) and Quebec (28%). Major occupations include:
machine operators and related workers in food, beverage and tobacco processing (NOC 946) and
labourers in processing, manufacturing and utilities (NOC 961).
The industry was the only manufacturing industry Real GDP and Employment Growth Rates
to post positive, albeit modest, growth in output in Food and Beverage Products
and employment from 2001 to 2010. This partly (%, annual average)
2001-2010
2011-2020
reflects the fact that production in food 1.5
manufacturing increased continuously over that
1.0
period, even during the recession of 2008 and
2009 when domestic demand was still supported 0.5
by growth in personal disposable income. On
average, real GDP in the industry grew at an 0.0
annual rate of 0.8%, with all the increase coming
Real GDP
Employment
from the food segment which expanded by 1.9% Sources: Statistics Canada (historical) and HRSDC 2011
annually. In contrast, production in the beverage COPS industrial scenario (projections).
and tobacco segment fell year after year during
the last decade, posting an average decrease of 3.1% annually. After remaining relatively flat over the
1990s, employment in the industry grew significantly in the first half of the past decade, driven by job
creation in food manufacturing. These gains were, however, partly offset by losses in the subsequent
years, particularly in 2009 and 2010, in response to slower growth in production and the need to
improve productivity. As a result, employment in the industry grew at an average annual rate of only
0.3% over the last ten years. Still, it was the only manufacturing industry to employ more workers in
2010 than at the beginning of the decade.
The performance of the industry in terms of production growth and job creation is projected to
strengthen over the next decade. Additional, albeit slower, growth in population and in personal
disposable income is expected to help support growth in domestic demand. Faster growth
projected in the accommodation and food services industry should also help to foster domestic
demand for food and beverage products. With respect to foreign demand, the industry could
benefit from the rapid expansion of the emerging economies, such as China, India, Brazil and
Vietnam. Rising household income in these countries is boosting global demand for food, and
this represents growing opportunities for Canadian exporters. In sum, both real GDP and
employment are projected to grow at an average annual rate of 1.4%, with employment reaching
an all-time high of 313,000 workers by 2020.
2
Wood Product Manufacturing (NAICS 3211; 3212; 3219)
This industry comprises establishments primarily engaged in manufacturing sawmills and wood
preservation; veneer, plywood and engineered wood products; and other wood products (such as
doors, windows and frames). Sawmills and wood preservation is the most important segment,
accounting for 53% of production in 2010, while the remaining output is almost evenly split
between the other two segments. The industry relies on both domestic and foreign markets, with
a large share of production shipped to the United States. China is also becoming a growing export
market, as the share of that country in total exports increased from 0.1% to 8.6% over the last
decade. The industry employed 111,800 workers in 2010 (6.4% of total manufacturing
employment), with 38% in sawmills and wood preservation, 16% in veneer, plywood and
engineered wood products, and 46% in other wood products. Employment is mostly concentrated
in Quebec (35%), British Columbia (26%), and Ontario (20%). Major occupations include:
machine operators and related workers in pulp and paper production and wood processing (NOC
943); other assembly and related occupations (NOC 949); labourers in processing, manufacturing
and utilities (NOC 961); and supervisors in processing occupations (NOC 921).
The industry had a strong performance in the Real GDP and Employment Growth Rates
first half of the last decade, driven by a in Wood Product Manufacturing
substantial increase in new housing demand in (%, annual average)
2001-2010
2011-2020
North America, mostly from the United States. 4
In the following five years, however, real GDP 2
and employment fell drastically, posting 0
cumulative drops of 34% and 31%, respectively.
During that period, the industry was affected by -2
the sharp appreciation of the Canadian dollar, -4
the intensification of global competition and,
Real GDP
Employment
more importantly, the severe contraction in the Sources: Statistics Canada (historical) and HRSDC 2011
U.S. housing demand and the deepest recession COPS industrial scenario (projections).
since World War II. Stimulated by the recovery
in foreign and domestic demand, output grew by 11% in 2010, while employment fell for a sixth
consecutive year, down by 5.0%. As a result, real GDP and employment declined at average
annual rates of 1.1% and 3.8% respectively in the past ten years.
Over the next decade, the industry is expected to benefit from faster investment growth in
residential structures in North America, primarily from the United States where housing starts are
projected to recover from historic lows of 600,000 units in 2009 and 2010 to an average of 1.3
million units from 2015 to 2020. The industry will also be spurred by rising demand in China,
which has become the first importer of wood products in the world. However, in addition to a
high Canadian dollar, the industry will keep facing three major challenges that will restrain its
performance. First, limited timber supply, partly due to the mountain pine beetle infestation in
British Columbia and reduced harvest area in Ontario and Quebec, will negatively impact
production and employment prospects. Second, the transportation costs of trees, which are rising in
line with oil prices and the increasing distance from cutting sites to mills, will likely limit improvements
in the cost-competitiveness of the industry. Third, China is quickly becoming a major producer and
exporter of several low-value added niche products such as hardwood flooring, prefabricated
fencing and fiberboard. As a result, real GDP and employment are projected to grow at average
annual rates of 2.5% and 1.0%, respectively. The projected increase in employment means that
less than one-tenth of the jobs lost during the last decade would be regained by 2020, primarily
reflecting the need to improve cost-competitiveness through additional gains in productivity.
3
Paper Manufacturing (NAICS 3221; 3222)
This industry comprises establishments primarily engaged in manufacturing pulp and paper as
well as converted paper products (such as paperboard boxes, corrugated boxes, fibre boxes and
sanitary food containers). Pulp and paper is the most important segment, accounting for about
two thirds of production. Overall, the industry is export intensive as more than two thirds of its
revenues come from foreign markets, largely from the United States. The two segments,
however, do not face the same degree of exposure to changes in domestic and foreign economic
conditions. Converted paper is highly dependent on domestic demand, with 75% of its production
sold within the country. In contrast, pulp and paper is far more sensitive to foreign demand, with
exports accounting for more than 80% of its production, largely shipped to the United States
(65% of all exports) but also to China (13%). The industry employed 73,600 workers in 2010
(4.2% of total manufacturing employment), with 62% in pulp and paper. Employment is mainly
concentrated in Ontario (36%), Quebec (35%) and British Columbia (13%). Major occupations
include: machine operators and related workers in pulp and paper production and wood
processing (NOC 943); machinery and transportation equipment mechanics (except motor
vehicle) (NOC 731); and labourers in processing, manufacturing and utilities (NOC 961).
The industry has been through difficult times Real GDP and Employment Growth Rates
over the last decade, primarily reflecting the in Paper Manufacturing
2001-2010
2011-2020
continued expansion of digital media which has (%, annual average)
2
resulted in lower demand for communication
papers, particularly newsprint in the United 0
-0.1
States. Indeed, Canadian exports of paper south -2
of the border have declined steadily since 2000.
The industry has also been challenged by the -4
strong appreciation of the Canadian dollar which -6
Real GDP
Employment
has reduced the effective price Canadian firms
receive for their products, since most of these Sources: Statistics Canada (historical) and HRSDC 2011
products are priced in U.S dollars. At the same COPS industrial scenario (projections).
time, operation and transportation costs have
been rising due to higher crude oil prices and the increasing distance between available trees and
manufacturing plants. These factors, combined with the global recession of 2008-2009, have
forced firms to undertake major restructuring by consolidating and upgrading facilities and
closing less efficient plants through mergers and acquisitions. On average, real GDP and
employment in the industry fell at annual rates of 2.9% and 4.4% respectively during the past
decade, with most of the decline occurring between 2005 and 2009.
The industry outlook is more optimistic for the next decade. Higher pulp prices and postrecession demand recovery in North America will allow production to record significant growth
in the short-term, while the development of the Chinese and other new markets will support
foreign demand in the longer term. The industry will also benefit from the Pulp and Paper Green
Transformation Program put in place by the federal government which injected $1 billion to help
manufacturers invest in new machinery and upgrade existing mills in order to reduce energy
consumption and improve productivity. This should provide a competitive boost to Canadian
firms in the face of a strong Canadian dollar and growing competition from Asian and South
American producers. However, as North American consumers increasingly switch to digital
media, the production of paper is not expected to return to its previous peaks. Real GDP growth
is projected to average 1.8% annually over the next decade. This modest rebound in production
should help employment to remain relatively stable, after many years of successive declines.
4
Printing and Related Activities (NAICS 3231)
This industry comprises establishments primarily engaged in printing and providing related support
activities such as pre-press and bindery work. Printing is among the few manufacturing activities in
Canada that are not significantly exposed to changes in global economic conditions and in the value of
the Canadian dollar as less than 10% of production is shipped to foreign countries, mostly to the United
States (80% of all exports). In 2010, the industry employed 86,200 workers (4.9% of total
manufacturing employment), largely concentrated in Ontario (48%) and Quebec (28%). Major
occupations include: print press operators, commercial drivers and other trades and related
occupations (NOC 738); printing machine operators and related occupations (NOC 947); and
contractor and supervisors, trades and related workers (NOC 721).
Following two-digit growth in 2000 and 2001, Real GDP and Employment Growth Rates
production in the printing industry began to trend in Printing and Related Actitvities
down in the following years. In 2010, GDP fell for (%, annual average)
2001-2010
2011-2020
the seventh time in the past nine years, recording a 2
cumulative drop in output of 26%. The decline in 1
activity was accompanied by a substantial
reduction in employment. In 2010, 7,400 jobs were 0
lost for a total of 45,800 since 2005. On average, -1
real GDP fell at an annual rate of 2.0% over the -2
past ten years, while employment decreased by
Real GDP
Employment
1.2% annually. This significant deterioration in the Sources: Statistics Canada (historical) and HRSDC 2011
performance of the industry primarily reflects the COPS industrial scenario (projections).
declining demand for printed materials largely
attributable to the increasing use of the Internet and various electronic media in many sectors of the
economy, particularly in information, communications, banking and advertising activities.
The next decade should remain difficult for the industry, as growth in domestic demand for printed
materials will continue to be restrained by the growing use of the Internet and electronic documents.
Consumers and businesses are also becoming more environmentally conscious, increasing their effort to
reduce their use of paper such as printed bills and promotional brochures. Furthermore, as babyboomers move into their retirement years, slower growth in the working-age population and population
aging are expected to restrain growth in consumer spending, particularly on semi-durable goods, which
may lead to lower needs for printed products in general (packaging, advertising, etc.). On the other
hand, growing demand for printed materials from emerging markets, such as China and India, could
lead to an expansion of exports in the longer term. This very challenging market environment is
expected to lead to modest growth in printing activities over the next ten years. Real GDP is projected
to grow at an average annual rate of 1.3%, while employment is projected to increase by 0.6%
annually. The slower pace of growth in employment reflects the need to improve
competitiveness, partly by increasing the computerization of many pre-press and production jobs,
in order to boost productivity.
5
Rubber, Plastics and Chemicals (NAICS 3251-3259; 3261-3262)
This industry comprises establishments engaged in making goods by processing raw rubber and plastics
materials (such as tires, hoses, polystyrene foam and various plastic products) as well as establishments
manufacturing chemical products from organic and inorganic raw materials (including petrochemicals,
fertilizers and pesticides, pharmaceutical and medicine products, paint, ink, soap and cleaning
products). Chemicals are the most important segment, accounting for 63% of the industry production in
2010, while rubber and plastics account for the remaining share of output. The industry is very
sensitive to changes in the North American economic conditions and the value of the Canadian
dollar as more than half of its production is delivered to foreign markets, essentially in the United
States. The industry employed 200,300 workers in 2010 (11.5% of total manufacturing
employment) about evenly split between chemicals (53%) and rubber and plastics (47%) and
mostly concentrated in Ontario (50%) and Quebec (31%). Major occupations include: machine
operators and related workers in chemical, plastic and rubber processing (NOC 942); supervisors,
processing occupations (NOC 921); and labourers in processing, manufacturing and utilities
(NOC 961).
After recording a strong performance from the end Real GDP and Employment Growth Rates
of the 1990-1991 recession through 2003, a period in Rubber, Plastics and Chemicals
over which production grew by a total of 80%, the (%, annual average)
2001-2010
2011-2020
2
industry activity began to fall and at an accelerating
pace. By 2009, real GDP had dropped for six 1
0.0
consecutive years, recording a cumulative decline 0
of 23%. The contraction in output was
accompanied by substantial declines in -1
employment from 2006 to 2009, totalling 57,000. -2
Real GDP
Employment
This notable deterioration in the performance of the
industry was partly due to the contraction in U.S. Sources: Statistics Canada (historical) and HRSDC 2011
residential and non-residential investment, the fall COPS industrial scenario (projections).
in motor vehicles production in North America,
and the substantial appreciation of the Canadian dollar, which made the industry much less competitive
on the U.S. market. GDP in the industry rebounded by 5.7% in 2010, spurred by the economic recovery
in North America. Employment, however, continued to fall. As a result, over the past ten years, real
GDP and employment decreased at average annual rates of 1.1% and 1.9%, respectively.
Over the next decade, the industry is expected to benefit from the economic expansion in North
America, particularly in the United States, where faster rates of growth in motor vehicle
production and business investment in residential and non residential structures are projected. In
addition, strong economic growth in emerging markets, such as China, Brazil, Vietnam and India,
should translate into greater opportunities for the industry. As a result, real GDP is projected to grow
at an average annual rate of 2.0% over the next ten years, while employment is projected to
remain stable. The lack of job creation primarily reflects the need to improve costcompetitiveness through additional gains in productivity in response to the projected elevated
Canadian dollar and rising foreign competition in both domestic and foreign markets.
6
Manufactured Mineral Products (NAICS 3241; 3271-3279; 3311-3315)
This industry comprises establishments primarily engaged in transforming crude petroleum and coal
into intermediate and final products (such as fuels, hydraulic fluids and asphalt), in manufacturing
bricks, ceramic products, cement and glass, and in smelting and refining primary metals (such as iron,
steel, copper or aluminum) for the production of bars, sheets, pipes, tubes or wires. Primary metals
products are the most important of the three segments, accounting for 55% of the industry production in
2010, followed by non-metallic minerals products (28%) and petroleum and coal products (17%). The
industry exports about 40% of its production. However, within the industry, primary metals products
are the most exposed to changes in global economic conditions as two-thirds of the output are shipped
to foreign countries, largely to the United States (75% of total exports). The industry employed
130,000 workers in 2010 (7.4% of total manufacturing employment) with 51% in primary metals
products, 35% in non-metallic mineral products, and 14% in petroleum and coal products.
Employment is concentrated in Ontario (37%) and Quebec (35%). Major occupations include:
machine operators and related workers in metal and mineral products processing (NOC 941); and
supervisors, processing occupations (NOC 921).
The industry posted strong growth in the first half of Real GDP and Employment Growth Rates
the past decade, largely driven by the increase in in Manufactured Mineral Products
demand for energy products, the booming (%, annual average)
2001-2010
2011-2020
construction sector in both Canada and the United 2
States, and large capital projects in the energy 1
0.0
sector. During that period, real GDP grew at an 0
-1
average annual rate of 2.6%. The faith of the -2
industry deteriorated dramatically thereafter, as -3
production fell for four consecutive years through -4
2010, partly because of the collapse of the housing
Real GDP
Employment
sector in the United States, the difficulties of the Sources: Statistics Canada (historical) and HRSDC 2011
North American auto industry, and the global COPS industrial scenario (projections).
recession of 2008 and 2009. The cumulative
decline in output totalled 21% over that period of four years and the level of production in 2010 stood at
its lowest level in thirteen years. Employment in the industry has been declining throughout the last
decade, likely reflecting the need to improve productivity and competitiveness. In 2010, the industry
employed 53,500 less workers than in 2000. On average, real GDP growth stalled in the past ten
years, while employment declined at an annual rate of 3.4%.
Over the next decade, the industry is expected to benefit from faster growth in business
investment in residential and non residential structures in North America, primarily from the
United States. Rising domestic and foreign demand for energy products will also help support
growth in the industry. However, in addition to the elevated Canadian dollar, the industry will
keep facing two major challenges that will restrain its performance over the longer-term. First,
the industry will have to cope with intensified import competition from low-cost producers,
particularly for primary metals. Second, slower growth in total labour force and employment will
restrain the demand for new office space from businesses, and thus, investment in non-residential
structures -- a key growth driver for the industry. As a result, real GDP and employment are
projected to grow at average annual rates of 2.0% and 1.2%, respectively. The projected rate of
increase in employment means that three-quarters of the jobs lost during the previous decade
would be regained by 2020.
7
Metal Fabrication and Machinery (NAICS 3321-3329; 3331-3339)
This industry comprises establishments engaged in manufacturing ferrous and non-ferrous metal
products (such as hand tools, architectural and structural products, boilers, tanks and shipping
containers, springs, wires, bolts and screws) and establishments producing industrial and commercial
machinery (used in the production process of various primary, construction, manufacturing and
services industries). Production in the industry is evenly split between its two segments: metal
fabrication (49% in 2010) and machinery (51%). Overall, the industry is export intensive as around
50% of its production is shipped to foreign markets. The two segments, however, do not face the
same degree of exposure to changes in domestic and foreign economic conditions. Metal fabrication
is highly dependent on the performance of the domestic economy, with about 75% of its production
sold within the country. In contrast, machinery is far more sensitive to foreign economic conditions,
with exports accounting for more than 70% of its production, largely shipped to the United States.
Overall, the industry employed 255,400 workers in 2010 (14.6% of total manufacturing
employment), with 58% in metal fabrication and 42% in machinery. Employment is mostly
concentrated in Ontario (44%), Quebec (26%) and Alberta (11%). Major occupations include: metal
forming, shaping and erecting trades (NOC 726); machinists and related occupations (NOC 723);
and machining, metalworking, woodworking and related machine operators (NOC 951).
The industry recorded a poor performance Real GDP and Employment Growth Rates
throughout the last decade. Real GDP posted in Metal Fabrication and Machinery
cumulative growth of only 1.4% between 2000 and (%, annual average)
2001-2010
2011-2020
the end of the North American economic expansion 4
in 2007. The weakness in output growth was partly 3
due to the sharp decrease in business investment in 2
machinery and equipment and non-residential 1
0
structures in the United States and to the substantial -1
appreciation of the Canadian dollar, which affected -2
the industry price-competitiveness south of the
Real GDP
Employment
border. However, the huge development of the oil Sources: Statistics Canada (historical) and HRSDC 2011
sands in Alberta helped to support production COPS industrial scenario (projections).
growth during that period. The industry was also
severely affected by the North American recession in 2008 and 2009. Production declined by a total of
20% during those two years, while employment fell by 32,800 on the heels of the 24,000 jobs that were
lost in 2006 and 2007. The economic recovery in 2010, particularly in residential and non-residential
investment in Canada, fuelled a 7.9% rebound in output on that same year. The industry continued,
however, to reduce its workforce in 2010 as employment fell by 9,800. On average, both real GDP and
employment decreased at an annual rate of 1.3% over the last ten years.
The long-term outlook is promising for the industry as activity will be fuelled by faster growth in
business investment in North America, particularly in the United States, and large energy and mining
capital projects in Canada. The industry is also expected to benefit from the federal government
National Shipbuilding Procurement Strategy ($35 billion will be invested over the next 35 years
to construct combat vessels and smaller ships), which will boost demand for metal fabrication
and machinery. Finally, capital spending in industrial machinery will continue to expand in emerging
markets, such as China, India and Brazil, and Canadian manufacturers should be in a good position to
meet this anticipated increase in demand. The resulting growth in real GDP is projected to average
4.2% annually over the next decade. However, additional gains in productivity are projected to
result in much slower growth in employment, averaging 1.2% per year.
8
Computer, Electronic and Electrical Products (NAICS 3341-3346; 3351-3359)
This industry comprises establishments primarily engaged in manufacturing information and
communication technology (ICT) devices, such as computers and peripherals, telecommunication
and audio-video equipment, measuring and guidance instruments, as well as electronic
components for such products. It also comprises establishments involved in manufacturing
products that generate, distribute and use electrical power, such as generators, transformers,
switchgears, batteries, wires, electrical motors and household appliances. ICT is the most
important segment, accounting for about two thirds of production. Overall, the industry is
strongly export-oriented, with more than 70% of its revenues coming from abroad, largely from
the United States (about 70% of all exports). The industry is also largely exposed to import
penetration with a substantial share of domestic demand met by imports, mainly from the United
States, China and Mexico. It employed 148,700 workers in 2010 (8.5% of total manufacturing
employment), with 69% in the ICT segment. Employment is mostly concentrated in Ontario
(66%) and Quebec (30%). Major occupations include: mechanical, electrical and electronics
assemblers (NOC 948); technical occupations in electronics and electrical engineering (NOC
224); and civil, mechanical, electrical and chemical engineers (NOC 213).
The industry was characterized by impressive Real GDP and Employment Growth Rates
growth in the late 1990s, largely driven by the in Computer, Electronic, Electrical Products
strong performance of the ICT segment. After (%, annual average)
2001-2010
2011-2020
the dot com bubble burst of 2001, production 4
fell sharply and remained low for most of the 2
decade. This reflects various challenges faced 0
-0.1
by the industry during this period, including the -2
market saturation for ICT products in the early -4
2000s (partly due to an over capacity in the -6
telecommunications infrastructure), the strong
Real GDP
Employment
appreciation of the Canadian dollar, and the Sources: Statistics Canada (historical) and HRSDC 2011
intensification of global competition on both COPS industrial scenario (projections).
domestic and foreign markets. Canada’s market
share in the United States has been declining since the 1990s, while imports from China have
surged, rising by 450% between 2000 and 2010. Producers are increasingly relocating to low-cost
countries and China’s market share in Canada is now exceeding that of the United States,
accounting for one third of Canadian imports of ICT products. On average, real GDP and
employment in the industry fell at annual rates of 5.6% and 3.3% respectively during the past ten
years, with most of the decline occurring in the early 2000s.
Over the next decade, the increased computerization of industrial production processes and the
growing popularity of wireless devices will continue to sustain demand for ICT products.
Production in the industry will be primarily driven by faster growth projected in business
investment in machinery and equipment (including ICT products) in Canada and the United
States. Consumer spending on ICT products is also projected to increase at a faster pace than
most other products and services, since this area has been accounting for a growing share of
household expenditures. Indeed, the short-life cycle of many ICT products generates faster than
average need for replacement. Finally, rising household income in emerging economies
represents an opportunity for the industry to diversify its exports outside the U.S. market. As a
result, real GDP is projected to rebound in the next ten years, averaging 3.7% annual growth.
Employment, however, is projected to decline marginally, reflecting the need to increase
productivity in response to the intensification of global competition and a strong Canadian dollar.
9
Motor Vehicles, Trailers and Parts (NAICS 3361; 3362; 3363)
This industry comprises establishments primarily engaged in manufacturing motor vehicles;
motor vehicle bodies and cabs, truck trailers and non-commercial trailers; and motor vehicle
parts, including engines. Motor vehicles and motor vehicle parts are the two largest segments,
accounting for 58% and 36% of production in 2010, respectively. Overall, the industry is highly
export intensive as around 75% of its production is shipped to foreign markets, mostly to the
United States which account for 97% of all exports. The three segments, however, do not face the
same degree of export intensity. The motor vehicles segment is the most export intensive
(average of 87% between 2005 and 2010), followed by motor vehicle parts (57%) and motor
vehicle bodies and trailers (29%). The industry employed a total of 136,600 workers in 2010
(7.8% of total manufacturing employment), with 38% in motor vehicles, 50% in motor vehicle
parts, and 12% in motor vehicle bodies and trailers. Ontario is by far the largest employer,
accounting for 85% of all automobile workers in Canada. Major occupations include: machining,
metalworking, woodworking and related machine operators (NOC 951); and mechanical,
electrical and electronics assemblers (NOC 948).
The industry has been through difficult times Real GDP and Employment Growth Rates
during the last decade. It has been challenged by in Motor Vehicles, Trailers and Parts
2001-2010
2011-2020
growing import competition in the North (%, annual average)
American cars and parts markets, the 4
appreciation of the Canadian dollar to parity 2
with the U.S. dollar, and the continuous increase 0
in gasoline prices to record levels, which led to a -2
shift in consumer preferences towards more fuel- -4
efficient Asian-made cars. Moreover, in 2008 -6
Real GDP
Employment
and 2009, the industry was severely affected by
Sources:
Statistics
Canada
(historical)
and
HRSDC 2011
the deepest U.S. recession in the post-World
COPS industrial scenario (projections).
War era, which led to a decline in new car sales
to levels not seen since the 1981-1982 recession.
As a result, the Detroit manufacturers undertook substantial restructuring programs, closing
several plants and cutting jobs, in order to improve cost-competitiveness and regain market
shares. These developments led to substantial declines in production and employment in the
Canadian industry. On average, real GDP contracted by 3.9% annually over the past decade,
while employment fell more severely, down by 5.3% per year. Both production and employment
rebounded in 2010 driven by the economic recovery. That year, however, the industry employed
about 100,000 fewer workers than at the start of the decade.
Over the next decade, the industry is projected to benefit from a rise in North American demand
from households and businesses, particularly from the United States where a huge pent-up
demand has been accumulated during the latest recession. However, a high Canadian dollar, the
intensification of competition on the international and domestic markets, and the increasing use
of foreign outsourcing for the production of parts are expected to restrain the performance of the
industry. Real GDP and employment are projected to grow at average annual rates of 2.9% and
1.8% respectively over the next ten years. The projected pace of growth in employment means
that only one quarter of the jobs lost during the last decade would be regained by 2020, primarily
reflecting the need to improve cost-competitiveness through additional gains in productivity.
10
Non-Automotive Transportation Equipment (NAICS 3364; 3365; 3366; 3369)
This industry comprises establishments primarily engaged in manufacturing aerospace products
and parts; railroad rolling stock; ships and boat building; and other types of transportation devices
(such as motorcycles, golf carts and bicycles). Aerospace is by far the most important component,
accounting for 75% of production in 2010. The industry is highly export oriented as around 60%
of its production is shipped to foreign countries, largely to the United States which represent half
of total exports. Within the industry, aerospace is the most exposed to changes in global
economic conditions as deliveries to foreign markets account for about 70% of total production.
The industry employed 82,500 workers in 2010 (4.7% of total manufacturing employment), with
76% in aerospace, 12% in ships and boat building, 7% in railroad rolling stock, and 5% in other
types of transportation devices. Employment is mostly concentrated in Quebec (49%) and
Ontario (28%). Major occupations include: mechanical, electrical and electronics assemblers
(NOC 948); other engineers (NOC 214); technical occupations in electronics and electrical
engineering (NOC 224); and other assembly and related occupations (NOC 949).
The industry experienced sizeable cycles during Real GDP and Employment Growth
the last two decades. Following very strong in Non-Automotive Transportation Equipment
2001-2010
2011-2020
growth between 1993 and 2000, it has been (%, annual average)
affected by the significant weakening in global 5
economic growth in 2001 and 2002 and the 4
3
terrorist attacks of September 11. Real GDP fell 2
markedly and a large number of jobs were lost. 1
Global demand, mainly for aerospace products, 0
began to recover in 2003, leading to five -1
Real GDP
Employment
consecutive years of vigorous growth in output.
But the global recession that began in 2008 had Sources: Statistics Canada (historical) and HRSDC 2011
a severe impact on the industry. Real GDP fell COPS industrial scenario (projections).
strongly in 2009 and also in 2010, with
substantial reductions across all components of the industry. These cutbacks in production were
accompanied by the loss of 5,340 jobs in 2010. On average, real GDP decreased by 0.3%
annually over the last decade, while the level of employment remained relatively unchanged.
The industry is projected to post the best performance among all 33 COPS industries in terms of
both production and employment growth over the next decade. It is expected to benefit from the
strong rise anticipated in global demand for air transportation equipment, particularly from
emerging markets like China and India. Changing demographics, increased road congestion and
environmental concerns will also foster global demand for transit systems, including rail.
Furthermore, the industry will be spurred by the federal government National Shipbuilding
Procurement Strategy ($35 billion will be invested over the next 35 years to construct combat
vessels and smaller ships). However, the intensification of international competition, particularly
in aerospace with the emergence of new producers from China, Russia and Japan, will represent
additional challenges for the industry. Real GDP is projected to grow at an average annual rate of
4.9% over the next ten years, compared to a slower pace of 2.4% for employment, reflecting the
need to improve cost competitiveness through additional gains in productivity. Nevertheless, total
employment in the industry is projected to reach an all-time high of 89,000 workers by 2020.
11
Textile, Clothing, Leather and Furniture
(NAICS 3131-3133; 3141-3149; 3151-3159; 3161-3169; 3371-3379; 3391-3399)
Other manufacturing is an aggregation of six industries: textile mills; textile product mills; clothing;
leather and allied products; furniture and related products; and miscellaneous products such as medical
equipment, jewellery, sporting goods, toys, and office supplies. Furniture and related products,
miscellaneous products, and clothing are the most important industries, accounting for 38%, 33% and
14% of total production in 2010, respectively. Overall, the other manufacturing industries are export
intensive, as 40% of their production is shipped to foreign countries, mostly to the United States. Textile
mills, leather and furniture are the most exposed to changes in global economic conditions with export
intensity of around 50%. Furthermore, textile product mills, clothing and leather have been facing a
substantial increase in import penetration in both the Canadian and U.S. markets from low-cost
producers, particularly from China. Together, the six industries employed 241,600 workers in 2010
(13.9% of total manufacturing employment), with 39% in furniture and related products, 33% in
miscellaneous products, 16% in clothing, 7% in textile product mills, 3% in textile mills, and 2%
in leather and allied products. Employment is mostly concentrated in Ontario (40%) and Quebec
(32%). Major occupations include: other assembly and related occupations (NOC 949); and
machine operators and related workers in fabric, fur and leather products manufacturing (NOC
945).
Following a stellar performance during the 1990s Real GDP and Employment Growth Rates
when production almost doubled and employment in Textile, Clothing, Leather and Furniture
2001-2010
2011-2020
reached an all-time high of 373,000 in 1998, the (%, annual average)
1
other manufacturing industries faced very difficult
0
times in the following decade. Intensified import -1
competition from low-cost producers, the reduction -2
of trade barriers (including the lifting of import -3
quotas on textile, clothing and leather products in -4
2005), the substantial appreciation of the Canadian -5
Real GDP
Employment
dollar, and the global recession of 2008 and 2009
Sources:
Statistics
Canada
(historical)
and
HRSDC 2011
led to substantial cutbacks in output and jobs.
COPS industrial scenario (projections).
Indeed, GDP fell for seven consecutive years from
2003 to 2009, down by a total of 39%, and 132,500
jobs were lost. GDP rebounded in 2010, spurred by the economic recovery, and 9,600 jobs were
regained. On average, real GDP and employment fell at annual rates of 4.5% and 3.8% respectively
over the past ten years. In percentage terms, textile mills, textile product mills, clothing and leather
posted the strongest fall in both production and employment during that period.
The next decade will remain difficult for this group of industries, as growth in consumer spending on
durable and semi-durable goods in Canada is projected to slow sharply due to massive retirements of
baby-boomers and slower growth in the working-age population. Moreover, the global competitive
environment will remain challenging as the value of the Canadian dollar is projected to stay high, while
foreign competition from low-cost producers will most likely continue to intensify. An encouraging
development is that furniture and related products should benefit from the projected surge in new
housing investment in the United States, which will boost demand for housing-related durable goods
produced in Canada. As a result, real GDP is projected to grow marginally at an average annual
rate of 0.3% over the next ten years, while employment is projected to decline by 3.0% annually.
The downward trend in employment primarily reflects the need to improve competitiveness
through additional gains in productivity.
12