Conference Board releases Canadian aerospace sector review

Avatar for Ken PoleBy Ken Pole | August 25, 2011

Estimated reading time 2 minutes, 31 seconds.

There is good news, tempered with some cautionary notes, in a review of the Canadian aerospace sector released on August 25 by the Conference Board of Canada.
On the positive side, the think-tank says a return of corporate and consumer confidence is driving an increase in air travel and that new orders for business jets and commercial aircraft will support a resurgence in the civil segment of the industry. Also, the growing importance of emerging markets and rising demand for more fuel-efficient aircraft can be expected to create more business opportunities in coming years.
On the cautionary side, military spending is said to be at risk. Faced with massive budget cuts, the U.S. and many European countries are planning to tighten . . . spending over the next several
years, but the Board notes that Canadian industry exposure is not overly large because the major companies manufacture a broad array of products, such as aircraft, engines and satellites, while the smaller ones are mainly subcontractors. Large companies enjoy economies of scale in design, manufacturing, and purchasing. Smaller companies can succeed by concentrating on select components and parts manufactured for the larger players.
Other challenges facing Canadian companies include accelerating labour costs, the appreciated value of the Canadian dollar and, a seemingly perpetual irony, long service lives of aircraft which mean that the industry needs new contracts for aircraft under development if it is to meet its growth potential.
With 2010 revenues of $8.6 billion, Bombardier Aerospace tops the Conference Board revenue rankings, followed by Pratt & Whitney Canada at $3 billion, and simulator manufacturer CAE Inc. third at just over $1,662 million. The rest of the Top 10 (millions) are: Magellan Aerospace Corp. ($687); Vector Aerospace Corp. ($566); Boeing Canada Inc. ($563); Textron Canada Ltd. ($393); Heroux-Devtek Inc. ($338); Northstar Aerospace Inc. ($221); and Avcorp Industries Inc. ($77).
Collectively, they employed some 62,400 persons in 2010 and although this was down 5.2% from the previous year, it was well ahead of 50,500 in 2007. The Board projects steady growth through to 70,300 by 2015.

Notice a spelling mistake or typo?

Click on the button below to send an email to our team and we will get to it as soon as possible.

Report an error or typo

Have a story idea you would like to suggest?

Click on the button below to send an email to our team and we will get to it as soon as possible.

Suggest a story

Leave a comment

Your email address will not be published. Required fields are marked *