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Canadian Office Furniture Market declines 5% a year for five year.

Saturday 16 November 2013

According to a new report by IBISWorld the Office Furniture Manufacturing in Canada industry has faced some headwinds over the past five years that can be directly tied to the recession. The United States is a major trading partner with Canada, and the slowdown in the US economy negatively impacted export sales over the five years to 2013. “During this time, exports of office furniture fell at an average annual rate of 5.3%, including a substantial 29.6% decrease in 2009.” Plummeting exports of office furniture coupled with a sharp 36.1% increase in the number of unemployed workers have caused Office Furniture Manufacturing industry revenue to fall an average of 4.9% per year to reach $4.1 billion in the five years to 2013. The lingering effects of the recession are clearly demonstrated in this overall downward trend. Although strong corporate profit levels and an increasing number of businesses after 2009 moderately drove industry revenue higher, these gains were not strong enough to overcome the overall losses experienced by the industry. Continued growth in corporate profit and persistent cuts to the national unemployment rate will lift industry revenue an estimated 0.2% in 2013.
Industry profitability has taken a beating over the past five years as industry operators continue to be undercut by low-priced imports. The average profit margin in this industry has fallen. Low profitability in this industry has caused the competitive landscape to become increasingly denser. “As a result of ailing profit margins, struggling firms are shutting down their operations temporarily, if not completely,” says Harrison. IBISWorld anticipates that the number of enterprises will shrink 1.4% per year in the five years to 2013.
Canada's dollar has negatively affected industry revenue by making their goods more expensive. The Canadian dollar has strengthened against the US dollar, hurting export sales while swelling the number of imports that are comparatively cheaper on the international market. The United States, whose trade accounts for nearly 95.0% of total export value, has purchased less Canadian furniture because of this fact. The value of the Canadian dollar will eventually fall to normal levels in the coming years, providing some export opportunities for Canadian firms. In addition, the number of Canadian firms will increase in 2018. As such, IBISWorld estimates that industry revenue will rise in the five years to 2018.

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