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Motor vehicle parts industry production expected to stall in 2013

Ottawa – Following a strong year in 2012, production in Canada's auto parts manufacturing industry will slow down significantly this year, according to The Conference Board of Canada's Canadian Industrial Profile - Summer 2013.


Ottawa – Following a strong year in 2012, production in Canada’s auto parts manufacturing industry will slow down significantly this year, according to The Conference Board of Canada’s Canadian Industrial Profile – Summer 2013.

“The motor vehicle parts industry will produce only marginal growth this year,” said Michael Burt, director, industrial economic trends. “However, this slowdown should only be temporary. US car sales are expected to reach their pre-recession level next year, which will drive parts production higher in the next couple of years.”

Parts production will edge up just 0.1% this year due to weak demand from automakers in late 2012 and early 2013. Production is expected to increase 5.5% next year, in line with strong gains in U.S. vehicle sales. However, with the ongoing shift in North American vehicle assembly away from the US Midwest and Ontario to the southern states and Mexico, the long-term growth of the auto parts sector is threatened.

Industry pre-tax profits will decline by 16.5% to $1.16 billion this year. However, they remain well above their pre-recession level.

The Canadian Industrial Profile Service is part of The Conference Board of Canada’s Industrial Economic Trends research. In all, outlooks for 23 industries are completed each year. The Summer 2013 edition includes outlooks for Aerospace Products Manufacturing, Furniture Products Manufacturing, Motor Vehicle Parts Manufacturing, Paper Products Manufacturing, Printing Services and Wood Products Manufacturing.