Canada’s Information Technology and Communications Industry: Industrial Outlook Autumn 2005

The worst of the ill effects of the tech bust are now behind Canada’s information technology and communications sector, as overall output has now surpassed its previous peak. Profits are expected to rise to $6.3 billion this year, an increase of $1.3 billion over 2004.

Still, while the computer systems design and telecommunications industries managed to weather the tech bust with only minimal damage, the computer and electronic product industry is still struggling, with real production still more than 40 per cent below its peak and profit margins well below their pre-bust averages.

Declining prices in the computer and electronic product and the telecom services industries, due to technological change and heavy competition, will continue to be major drags on profitability over the outlook period. Profit growth will average 2.3 per cent per year between 2006 and 2009.