Manufacturing activity has slowed in these downstream industries, which translated into lower demand.
New York, NY (PRWEB) February 04, 2014
The Printing, Paper, Food, Textile & Other Machinery Manufacturing industry provides industrial equipment and machinery to disparate downstream manufacturing industries. Following a path that has plagued Canada's entire manufacturing sector, industries in food processing, paper production, textiles and printing services have experienced declining demand in the past five years. Underlying this trend is the reallocation of production to countries with more competitive labour and production costs, as well as an appreciating Canadian dollar that has encouraged imports of these products. As a result, manufacturing activity has slowed in these downstream industries, which translated into lower demand for machinery upgrades and replacements. Consequently, industry revenue is expected to decline at an annualized 2.0% to $1.4 billion in the five years to 2014.
According to IBISWorld Industry Analyst Darryle Ulama, “The strengthening Canadian dollar has had a dual effect on industry manufacturers in the past five years.” Firstly, it has indirectly raised the purchasing power of Canadian citizens, allowing them to purchase a greater amount of imported goods while also lowering demand from downstream domestic manufacturers. As these downstream industries struggle to compete with imports, they have postponed purchases of industrial machinery from industry operators. Secondly, and more directly, the rising value of the Canadian dollar has weakened the industry's export segment, as industry products become more expensive on the world market. In the five years to 2014, the value of industry exports grew at a tepid annualized rate of 0.2% to $466.0 million. The compounding effect of a strong Canadian dollar has translated to revenue in declines; in 2014, industry revenue is expected to decrease by an additional 4.2%. To retain profit, industry manufacturers have slimmed their labour force and shut down plants.
Without strong public policy intervention, overall manufacturing activity is anticipated to continue its exit in the five years to 2019. “Although demand from food manufacturing is expected to pick up during this period, declines in downstream paper and textile manufacturing are expected to offset this,” says Ulama. Additionally, the Canadian dollar is projected to continue appreciating in the next five years. This will hamper demand from downstream industries, as well as the industry's export segment. As a result of these trends, industry revenue is expected to decrease in the five years to 2019.
For more information, visit IBISWorld’s Printing, Paper, Food, Textile & Other Machinery Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
The Printing, Paper, Food, Textile & Other Machinery Manufacturing in Canada contains an amalgamation of disparate industrial machinery manufacturing, including machinery for food processing (e.g. ovens), machinery for sawmills and paper industries (e.g. log splitters), machinery for printing industries (e.g. printers) and other industrial machinery (e.g. knitting machinery and kilns).
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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