Canada’s Paper Products Industry: Industrial Outlook Spring 2005

The Canadian Industrial Outlook sets the stage for the Canadian economy by examining 10 key industries.

Document Highlights

Profits in Canada’s paper products industry, which includes all pulp and paper product manufacturing, are expected to decline from $1.2 billion in 2004 to $723.2 million 2005.

Although production has recovered partially from the low it reached in 2001, prices remain generally weak. The strengthening of the Canadian dollar over the past two years has placed additional downward pressure on prices by lowering the effective price received for exports to the United States.

But in 2006, profits will rise to $1.3 billion, despite only modest gains in prices and production. Profits are expected to rise further in 2007, reaching $1.5 billion, and then rise more slightly in the outlying years of the forecast.

The industry will still face several challenges, including a limited ability to enact price increases, very limited growth in demand for key products, such as newsprint, and rising import penetration. Nevertheless, industry restructuring to improve the mix of paper grades produced and its cost structure will allow profits to rise gradually.