Foreign investment and activity will propel demand for industry products
New York, NY (PRWEB) December 20, 2014
Canada is one of the world's largest energy producers, and the country's standing in global energy markets has greatly benefited the Mining, Oil and Gas Machinery Manufacturing industry. The mining sector in Canada is significant; however the growing oil and gas sectors are the primary drivers industry performance. Vast oil and gas reserves in Canada have become increasingly economical as technology has improved. In addition, industry operators, along with their downstream counterparts, are heavily investing in research and development to develop equipment that is economical, safe and effective to extract unconventional resources. However, the industry is at the mercy of both global commodity markets and regulators, as demand is largely driven by oil and gas production. Consequently, industry revenue has grown in the five years to 2014. Nevertheless, revenue is anticipated to fall in 2014, as downstream operators' surge of investment in 2011 have satiated demand for new machinery during the period, and falling oil and gas prices in 2014 have curtailed exploration and production projects.
Greater investment in unconventional oil and gas deposits will bolster industry performance over the next five years. IBISWorld Economic Analyst James Crompton says in the updated report “participation of international oil companies in Canada's oil and gas sector will drive demand for industry products, as foreign operators have been investing in Canada, most notably in Alberta, to gain expertise in unconventional extraction techniques.” This trend will persist in the five years to 2019, despite regulatory hurdles for downstream operators. IBISWorld expects that industry revenue will expand in the five years to 2019. The environmental impact of unconventional oil and gas extraction techniques, which require the use of this industry's products, has been widely debated, and this debate is expected to continue through the five years to 2019.
While the industry's downstream customers encounter an array of challenges on a yearly basis, this industry will experience less volatility due to the high level of demand for its products over the next five years. “There are no substitutes for industry products, which has benefited the industry's operators in the form of healthy profit margins,” Crompton says in the updated report. IBISWorld anticipates investment in the industry will continue to be strong.
For more information, visit IBISWorld’s Mining, Oil & Gas Machinery Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures oil and gas field equipment and underground mining machinery. Products include rotary and portable drilling rigs and parts; crushing, pulverizing, screening and mineral processing machinery; and derricks, substructures and related accessories. The following are excluded: machinery with dual construction and mining uses; conveyors for coal and ore; underground mining locomotives; and offshore drilling production platforms.
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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