New aerospace report reveals increased sales and R&D, with future growth projected

The second annual report on The State of the Canadian Aerospace Industry shows that the sector boosted sales by 9.2% to $25.1 billion and increased R&D expenditures by 6.3% to $1.7 billion, with 80% of products destined for export markets. In addition, the sector contributed 172,000 jobs and nearly $28 billion to the Canadian economy in 2013, making aerospace one of Canada's biggest technology-based economic drivers.

Canada is also a major player in civil and defence simulation systems, due primarily to the dominant position CAE Inc holds in this industry niche.

The report is a joint effort between the Aerospace Industries Association of Canada (AIAC) and Industry Canada. AIAC contributes intelligence based on its access to detailed qualitative feedback and insights from its members within the industry and Industry Canada provides detailed statistics and industry analytics.

"Aerospace is a strategic economic contributor to Canada's aerospace industry and a prime example of the future of modern manufacturing," states AIAC. "Annually releasing statistical data relating to the make-up of the industry, its activities, and its impact allows policy makers and business leaders to understand the trends that are affecting the industry and develop strategies to further enhance its competitiveness in the future."

The report finds that the industry is comprised of more than 700 companies of all sizes — foreign-based and domestic. Manufacturing accounts for 70% of overall industry activity, dominated by the production of business jets. Maintenance, repair and overhaul (MRO), accounts for the remaining 30% .

With Canada's pending entry into the large jet market, "the vast majority of forecasted growth is expected to come from new platforms entering the market during the 2014-2021 period", cementing Canada's status as the third largest producer of civilian aircraft in the world.

The report states that 20% of the industry's activity is dedicated to R&D, giving the sector an R&D intensity five times as much as Canada's total manufacturing average.

In the space systems sub-sector, engineers, researchers, scientists and technicians comprise more than 50% of total employment and smaller firms have a higher R&D intensity than large firms and account for 25% of space systems R&D.

Defence simulation systems account for 25% of the aerospace defence industry while MRO/In-Service Support accounts for 40% of aerospace defence revenues.

Typical users of the report are government, industry and media. In future reports, AIAC and Industry Canada will consider providing greater detail on the breakdown in sales and R&D expenditures between the aerospace and space and civilian and defence subsectors.

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