A weak US dollar drove down exports, but rising international trade and construction activity will benefit the industry
Los Angeles, CA (PRWEB) December 12, 2013
The Plastic and Resin Manufacturing industry in Canada has faced several setbacks over the past five years, which can be directly tied to the recession. The United States is a major trading partner with Canada and the United States' economy suffered one of the worst recessions in its history. The financial crisis severely weakened the US dollar against the Canadian dollar, negatively impacting export sales in this industry. Between 2008 and 2013, exports of plastic and resin products fell at an average annual rate of 3.4%, which included a 31.1% decline in 2009 alone. The lack of sales to international markets, coupled with weakening demand from downstream manufacturing industries, has caused industry revenue to fall at an average annual rate of 2.5%, to $10.0 billion in 2013. The lingering effects of the global recession are clearly demonstrated in this downward trend. While consumers tightened their budgets during the recession and bought fewer manufactured goods, consumer spending rebounded resiliently thereafter, renewing demand for plastic and resin products. Continued growth in consumer spending and manufacturing activity will lift industry revenue an estimated 15.1% in 2013.
According to IBISWorld Industry Analyst Olawale Harrison, “Rising construction activity over the next five years will help this industry continue to add on gains accomplished since 2010.” Rising construction activity during this time will help bolster industry revenue. Canada is currently in the midst of a real estate boom and growth within the residential and nonresidential construction markets will boost demand for plastic building components and other materials serviced by this industry. Mounting revenue streams will start to attract new entrants into this industry, causing the number of industry enterprises to increase as well.
It is also important to note that it is in this industry's best interest for there to be a devaluation of the Canadian dollar. A strong Canadian dollar hurts export sales while swelling the number of imports that are comparatively cheaper on the international market. “Exports currently generate 64.1% of industry revenue but this number could rise if Canada's dollar value declines slightly against the US dollar,” says Harrison. The Plastic and Resin Manufacturing industry in Canada exhibits a low level of market share concentration, with the top four players being NOVA Chemicals Company, Dow Chemical Company, Momentive and Arclin.
For more information, visit IBISWorld’s Plastic & Resin Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
The Plastic & Resin Manufacturing in Canada industry manufactures resins, plastic materials (i.e. polymers) and synthetic rubber. Key product groups include thermosetting resins, thermoplastic resins and synthetic rubber. Raw material inputs are sourced from chemical industries and industries involved in producing petroleum-based feedstock.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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