According to a report conducted by the Conference Board of Canada, demand for new aircraft is on the rise.

The report, titled Industrial Outlook: Canada’s Aerospace Industry—Spring 2013, states that production in Canada’s Aerospace Industry is expected to increase over the next four years.

Maxim Armstrong, a senior economist for the Conference Board of Canada, supports the report, reiterating, “New-order books are starting to look better, partially rising orders for the C-Series, Bombardier’s upcoming aircraft, and renewed strength in the demand for high-end business jets.”

As recent as April, the aerospace industry’s backlog of orders has totaled $38.5 billion – surpassing its pre-recession peak – although their effect on overall production will only be modest in the short-term. As the C-Series moves into production and deliveries of other aircraft begin to accelerate, slumping sales should improve by 2014, officials say.

The industry is not expected to increase until next year, and the sector, as a whole, will not exceed its 2008 production levels until 2017, officials say.

Armstrong stresses patience, stating, “It will take years for the industry to fully benefit, but production is beginning to accelerate.”

He adds that high oil prices can help aerospace manufacturers promote new, more fuel-efficient aircraft. However, low oil prices can reduce pressure on buyers to renew their fleets, he says.

The modest pace of global economic activity has limited demand for air cargo or passenger services. Furthermore, the inventory for used aircraft remains reasonably high, which weakens demand for new production, the organization says in a prepared statement.

Industry revenues can be rather volatile, officials say, depending on when aircraft are shipped – and the industry’s recent performance is no exception. Despite the improving order book, sales actually dropped 0.5 percent in 2012 as shipments reportedly fell near the end of the year.

About the Conference Board of Canada
The Conference Board of Canada is the foremost independent, not-for-profit applied research organization in Canada. They are experts in running conferences as well as conducting, publishing, and disseminating research; helping people network; developing individual leadership skills; and building organizational capacity. The Conference Board of Canada’s overall mission is to build a better future for Canadians by making its economy and society more dynamic and competitive.


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