The value of the Canadian dollar will remain low, encouraging growth in the export market.
New York, NY (PRWEB) January 16, 2015
The Navigational Instruments Manufacturing industry supplies a range of technical and analytical devices to client industries in defense, construction and manufacturing. Over the five years to 2015, import competition has eroded the industry's domestic presence. “Foreign manufacturers, particularly in China and the United States, have taken advantage of lower labour costs to produce competing products at lower price points,” according to IBISWorld Industry Analyst Darryle Ulama. In 2015, imports are expected to satisfy as much as 90.1% of domestic demand. As a result, domestic production has contracted; in the five years to 2015, industry revenue is expected to decrease at an annualized rate of 0.2% to $4.4 billion.
The industry is heavily reliant on trade, and both import and export activity are high among industry manufacturers. In 2015, exports, primarily to the United States, are expected to account for 81.1% of industry revenue. Thus, exchange rate fluctuations of the Canadian dollar and changes in the relative prices of Canadian goods are primary drivers of industry performance. In the five years to 2015, the Canadian dollar is expected to depreciate at an annualized 2.3%, forcing down the relative prices of Canadian goods on the global market. Consequently, export growth has outpaced industry revenue, increasing at an average annual rate of 2.6%.
The industry has benefited from recent growth in domestic construction and scientific and technical services, translating to 1.4% growth in revenue in 2015. “Nevertheless, Canadian manufacturers are exiting the industry or relocating production plants due to intensifying import competition,” says Ulama. In the five years to 2015, the number of industry establishments is expected to decrease at an annualized 1.3% to 707.
Similar trends are expected to occur over the next five years. The value of the Canadian dollar is forecast to remain low, encouraging growth in the export market and somewhat limiting import penetration. Additionally, the strengthening American dollar will bode well for the industry's export segment, as industry products become relatively inexpensive to American customers. Nevertheless, foreign competitors will continue to challenge the industry. These competing trends will enable slow revenue growth: in the five years to 2020, industry revenue is forecast to increase at an annualized 0.9% to $4.6 billion.
For more information, visit IBISWorld’s Navigational Instrument Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry primarily manufactures navigational, measuring and control instruments. Its products include aeronautical instruments, appliance regulators and controls (except switches), laboratory analytical instruments, navigation and guidance systems and physical properties testing equipment.
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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