Canada's pharmaceutical products industry stands out for its strong growth during the 2008-09 recession. This sets it apart from other industries covered in the Winter 2010 edition of The Conference Board of Canada's Canadian Industrial Profile Service - chemicals, plastic and rubber products, non-metallic mineral products, and computer and electronic products, which will take at least a couple of years to return to pre-recession production, revenue and profit levels.
"Several factors are assuring continued strong demand for pharmaceutical products. The population is aging and much of what people spend on health care cannot be considered discretionary purchases," said Michael Burt, Associate Director, Industrial Economic Trends. "The other industries covered in this outlook were heavily affected by the recession, as demand plummeted. Although the economy is growing again, the relatively modest rebound will delay the return to pre-recession performance in these four industries."
The Canadian Industrial Profile, produced by The Conference Board of Canada in collaboration with the Business Development Bank of Canada (BDC), provides a five year economic outlook for key industries.
"During more challenging times, BDC is able to step in either with increased financing or with consulting services to help entrepreneurs overcome current challenges or seize promising opportunities", said Jérôme Nycz, Vice President, Strategy and Enterprise Risk Management. "Through several previous recessions, including the most recent one, we have seen many businesses grow, despite a reduction of activity in their sector. When a business financial situation is healthy before entering a recession, and if it's professionally managed, chances are it will go through this difficult period and be stronger when the economy recovers".
Chemicals
Pricing, production and profits all declined in 2009, as every segment of the industry was negatively affected by the recession. Profits are expected to decline again in 2010, dropping to $1.9 billion. However, the construction and automotive industries are major users of chemical inputs, so their rebound will also eventually benefit chemical manufacturers.
Computer and Electronic Products
With demand down in Canada and the United States, profits plunged by 36 per cent in 2009, forcing the industry to cut employment from 109,400 to 91,500 in just one year. The industry continues to struggle with weakened pricing power as new technologies cause rapid product obsolescence. As result, profits will fall again in 2010 to less than $1 billion, before beginning to rise again in 2011.
Non-Metallic Mineral Products Industry