Canada's aerospace industry should post a modest profit of $620-million this year despite difficult market conditions marked by declining demand for high-margin business jets, says a just-released report by the Conference Board of Canada.
The aerospace industry in Canada has been holding up rather well through the current global downturn, according to the report, Canadian Industrial Outlook: Canada's Aerospace Product Manufacturing Industry - Spring 2009.
"Although the aerospace industry is being affected by the recession, it is currently faring better than many other industries," said Valerie Poulin, Conference Board economist, in a news release Friday.
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"However, the industry's customers are beginning to rethink or even cancel orders due to a decline in air travel and their difficulties raising credit to pay for new jet. The next 12 months will shape the industry's longer-term well-being."
Among the larger Canada aerospace companies are commercial and business jet manufacturer Bombardier Inc. , engine maker Pratt & Whitney Canada Corp. and landing-gear maker Heroux-Devtek Inc.
Profits fell to $592-million in 2008 and should remain fairly stable over the next two years, says the report. Profit margins, however, will stay slim over the next five years, it says.
Margins fell to a low of 2.7 per cent in 2008 and are expected to average only three per cent annually over the next five years.
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The report is sponsored by the Aerospace Industries Association of Canada.