Short-Term Growth Expected for Glass Product Manufacturing in Canada
June 27, 2014
Over the past five years, the glass product manufacturing industry in Canada has declined as both consumers and businesses have increasingly turned away from the use of domestic glass. Substitute goods such as plastics and metals have become more popular, and faltering construction levels have exacerbated declines in demand during the start of the five-year period. Furthermore, the industry has been exposed to an intensifying level of globalization, including increasing import activity and decreasing export demand. Imports have grown to account for the vast majority of domestic demand.
IBISWorld estimates that 67.7% of domestic demand will come from imports in 2014, with the industry's largest trade partners being the U.S., China, Mexico and Germany. As a result, industry revenue is estimated to decline at an average annual rate of 3.3% to $1.5 billion over the five years to 2014. Conditions are expected to improve slightly in 2014 because of increasing construction and consumer spending in the U.S. and Canada. Consequently, revenue is projected to grow 1.1% in 2014.
According to IBISWorld industry analyst Jeremy Edwards, “Falling industry profitability and the rising prominence of imported goods have encouraged many companies to exit the industry entirely.” In addition, major companies have consolidated their operations by purchasing smaller operators. As a result, the number of industry enterprises is projected to fall an annualized 1.4% to 543 over the five-year period.
The industry is expected to enjoy short-term growth due to a burgeoning construction sector in the U.S., which is the industry's key export partner. In addition, improving construction in Canada will help drive new growth for glass products. Nonetheless, revenue is expected to resume falling in 2016. “As downstream customers continue to use more affordable substitute goods, demand for industry goods will continue to suffer,” said Edwards.
For more information, visit www.ibisworld.com.