A lack of private and public investment will restrain industry growth in the coming years
New York, NY (PRWEB) April 11, 2014
The past five years have been rocky for the Medical Device Manufacturing in Canada industry. Despite the indispensable nature of medical devices, the effects of the recession on some of the industry's largest export markets, coupled with slower growth in total health expenditure and capital investments, took a toll on manufacturers. Many large industry operators closed underperforming plants, and some international companies have avoided entering the Canadian medical devices market due to this difficult operating environment. During the five years to 2014, IBISWorld expects revenue to contract at an average annual rate of 2.3% to $4.0 billion. As the economic climate improves, however, revenue is expected to grow 3.6% in 2014, signaling a turnaround for the industry.
According to IBISWorld Industry Analyst Jocelyn Phillips, “Driven by cost containment and reduction across the healthcare sector, healthcare providers have been seeking competitive pricing to cut costs and manage budgets.” Therefore, many health agencies have joined group purchasing organizations, which have power to negotiate prices with medical device manufacturers and other providers of goods and services. Over the past five years, these pricing pressures and downstream consolidation have spurred mergers and acquisitions within the industry. Meanwhile, shorter product life cycles and the high cost of developing new technology have provided further impetus for industry operators to consolidate.
Given its financial stability and abundant resources, Canada has the potential to grow into a hub for medical device innovation. Canada is home to some of the world's most recognized scientific research institutions, and a large number of experienced, highly trained researchers. “Canada also holds a strong track record for conducting clinical trials, which stimulate innovations in the healthcare and medical devices sector,” says Phillips. Due to these strengths, IBISWorld forecasts revenue will grow at an annualized rate of 3.4% to $4.7 billion in the five years to 2019. Consolidation activity will likely remain robust, although not due to the economic hurdles the industry faced in the past; instead, most acquisitions will be spurred on by a desire on behalf of large companies to acquire the most cutting edge technological developments. Still, despite these advantages, industry growth will likely remain somewhat hampered by a shortage of investment, a relative lack of incentives to attract and retain industry participants, and stringent regulations.
For more information, visit IBISWorld’s Medical Device Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
The Medical Device Manufacturing in Canada industry includes manufacturers of electromedical and electrotherapeutic apparatus, such as magnetic resonance imaging equipment, medical ultrasound equipment, pacemakers, hearing aids, electrocardiographs and electromedical endoscopic equipment. The industry also manufactures irradiation apparatus and tubes for medical diagnosis, medical therapy, industrial research and scientific evaluation.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.