Manufacturing News from the Engineered Designer Perspective

Aerospace industry fuelled by emerging markets: BMO

Momentum is building in the North American corporate aviation sector with orders and deliveries of corporate jets increasing “significantly” this year. Growth in the aerospace industry overall is forecast to be in the 5 per cent range through 2016, reports BMO Capital Markets. Much of the demand in the market is coming from China and the United Arab Emirates, and Canadian and US aerospace industries will benefit from the fast-growing emerging markets, the report says.

Although the American producers have “a slightly stronger foothold” in the markets of developing economies than Canadian producers do, Canadian aerospace parts manufacturers are still benefiting by selling to American aircraft producers.

Bombardier-aerospace-aviation-industry-EDIWeekly
Bombardier milestone: the company delivered its 400th Challenger 300 jet. The Canadian aerospace leader forecasts that commercial demand will shift from smaller aircraft (20–59 seats) to larger craft, up to 149 seats, over the next 20 years. Bombardier says China and India will be the fastest growing major economies in that time.

Canada is ranked fifth largest aerospace producer in the world, BMO says, while the United States alone accounts for nearly half of global revenue in aerospace. The combined North American industry generates $200 billion in revenue. Growth of demand within the North American market is “likely to remain moderate but relatively stable.”

Growth in air travel and cargo volumes will support airline profitability globally, the report says, as will the gradually improving global economy and continuing low interest rates.

BMO flags several factors that will impact the aerospace industry, positively and negatively, in the next few years. The “solid recovery” in private demand has led to a record backlog of unfilled orders and a ramping up of production which should continue for the next five years or so.

The demand for more fuel-efficient aircraft is also a positive force for companies like Bombardier. As global fuel prices rise, demand for aircraft that can help airlines save on fuel costs rises. The Bombardier C-Series regional jet is designed to improve fuel consumption.

Downward pressure, especially on the US aerospace market, could come in the form of defence spending cuts, though the renewal of older military fleets in the US could provide support to counter those cuts.

BMO also cautions that an “eventual” rise in interest rates will temper demand growth in an industry where buyers typically rely heavily on financing. As well, the elevated Canadian dollar presents a challenge to Canadian producers’ competitiveness internationally.

The National Research Council (NRC) announced new support for Canada’s aerospace industry, including a number of programs aimed at improving the safety and comfort of travelers. Researchers will look into ways to reduce the threat of icing and the cost of preventing it, for example. It will also work with the industry to help simplify the certification and market delivery of new aeronautical products.

More Great Stories
World’s fastest electric car sets new performance benchmark for EVs
“We believe that when the car ownership experience exceeds expectations, electric vehicles wil [more]
Manufacturing sales up in September but shadow of Trump looms over Canada
Manufacturing sales rose for the fourth consecutive month in September, Statistics Canada report [more]
Government urges aerospace innovation, adoption of new technologies
Speaking at an Aerospace Industries Association of Canada (AIAC) conference today, the federal m [more]
Israeli aluminum-air electric car battery to be tested in Montreal
An Israeli company that demonstrated an electric car battery capable of powering a car for 1,800 [more]
UC engineers create first semiconductor-free microelectronics device
The quest for greater conductivity in semiconductors for microelectronics devices has led Univer [more]
Securing new investment greatest achievement of Unifor’s agreement with Ford
The headline achievement of Unifor’s just-ratified contract with Ford, the last of the three n [more]

Other Popular News and Stories

  • FTG Aerospace to supply avionics to Rockwell Collins
  • Canadian business, except energy, had profitable Q4: Statistics Canada
  • Manufacturing the sole industry showing job losses in February
  • GM investing $250 million at Ingersoll plant
  • Volkswagen to produce super-efficient hybrid
  • Miners struggling with higher costs, lower prices
  • BC refinery close to financing deal
  • RV industry has growing role in Canada's economy: study
  • Skilled labour shortage in world oil industry: report
  • Canada keeping up pressure on US for Keystone XL approval
  • Russian leasing company orders 42 CSeries jets from Bombardier
  • Pratt & Whitney Canada announces helicopter engine contracts
  • Bombardier holds update on CSeries aircraft
  • Bombardier nearly ready to flight test CSeries
  • Japex to buy into west coast LNG development
  • Economy managed slight growth in Q4, but shrank in December
  • Clean energy expected to surge as pv costs drop
  • Canadian oil production up; producers turning to railways for shipment
  • SPPCA's new landing gear facility opening in Mississauga
  • DART Aerospace re-branding itself to reach wider markets