GHY Tradelines

(Conference Board of Canada)

The financial prospects of Canadian manufacturers in three industries – chemicals, non-metallic mineral products, and plastics and rubber products – are improving.  Expanding industrial activity in North America has been a key driver of growth, but the ongoing development of new markets and innovative new products have also contributed to stronger performances.

These findings are from the Canadian Industrial Profile-Winter 2012, published by The Conference Board of Canada in association with the Business Development Bank of Canada (BDC).

“What we are seeing with BDC clients in these manufacturing sectors corroborates the conclusions of the industrial profiles: companies are in better financial health today than they were two years ago.  Also, a high percentage of new BDC loans to these companies was for the purpose of increasing their production capacity and improving their productivity.  That’s an encouraging sign,” said Pierre Cleroux, Vice-President, Economic Analysis, Business Development Bank of Canada.

“The market opportunities are there.  The performance of companies in the manufacturing sector will, however, depend on their leaders’ ability to identify and take advantage of these opportunities.  Because of the prevailing global competition, it is crucial for entrepreneurs to continue their efforts to offer innovative products, find new markets and introduce ways of improving their productivity.”

“The manufacturing sector in North America is growing, which bodes well for these three industries.  Much of their output supplies other industries and manufacturers.  However, with the Canadian dollar at parity, manufacturers will need to be innovative with their product offerings and where they are selling if they are to fully benefit from improving market conditions,” said Michael Burt, Director, Industrial Economic Trends, The Conference Board of Canada.

Plastic and Rubber Products Industry 
While dependent on construction activity and the manufacturing sector – notably motor vehicles – for much of its sales, the industry has found new markets both in terms of customers and products.  Technological development continues to broaden the potential uses of plastic as a substitute for other materials.  Moreover, Canadian firms are looking outside North America for growth opportunities.  Plastics companies are also partnering with chemical producers to develop and use bioplastics.  The industry’s improving performance will allow profitability to double in 2012, to $831 million.

Non-Metallic Mineral Products Industry 
Industry demand primarily comes from the Canadian construction industry.  The near-term outlook for the construction sector is mixed – residential construction remains solid, but government stimulus programs are coming to an end, which is dragging on non-residential expenditures.  As a result, the industry will experience only modest growth in 2012, but will improve progressively along with construction demand in the following years.

Chemicals Industry
Total output and employment will not return to its pre-recession production until 2013, but the industry is poised for steady growth throughout the next five years.  Rising demand for a variety of chemicals used in different manufacturing processes bodes well for the industry.  Emphasis on the development of advanced specialty chemicals will help the industry stay competitive since they often benefit from patent protection.

This edition of the Canadian Industrial Profile Service also includes outlooks for Pharmaceutical Products and Computer and Electronic Product Manufacturing.  Part of The Conference Board of Canada’s Industrial Economic Trends research, the service provides a five-year (2011-2015) production, revenue, cost and profitability forecast for six industries each quarter.  In all, outlooks for 23 industries are completed each year.

The publications are available at www.e-library.ca. BDC clients who wish to receive a copy of the profiles free of charge can contact their BDC account manager.
 

(Journal of Commerce Online – Mike King)

China plans to build the world’s largest cargo airport near Beijing in a $4.8 billion project due for completion in late 2017.

The new airport, which has not yet been named, will have an annual capacity of more than 130 million passengers and 5 million metric tons of cargo. Construction of the nine runways at a 6,600-acre site at Daxing, 30 miles south of Beijing, will begin this year. [The new mega-airport – tentatively to be named “Beijing Daxing International” – will be roughly the size of Bermuda. — Ed. note]

Beijing International Airport, the capital’s major air cargo hub, handled 1.7 million tons of cargo last year, up 10.7% year-over-year, according to preliminary figures from Airports Council International. The airport is the second largest by volume in China after Shanghai’s Pudong International Airport. Read more here.
 

(Eric Kulisch — American Shipper)

Extending the re-validation cycle for companies in the Customs-Trade Partnership Against Terrorism by a year will not adversely impact supply chain security, according to Shawn Beddows, the U.S. Customs official directly in charge of the program.

The Obama administration’s budget plan for fiscal year 2013 calls for a $5 million reduction in C-TPAT spending, with the money diverted instead to pay for frontline inspection operations. Most of the savings are to be achieved by scheduling follow-on verifications of trusted shippers’ supply chain security practices every four years, instead of three. […]

Another possible change to C-TPAT is the addition of an export component. CBP officials, acquiescing to private sector demands for a program that would make it easier to comply with the cargo security programs of foreign governments, in recent months have said they are contemplating a security program for exporters.

Customs is expected to consider several approaches for export verification, including flipping the C-TPAT import criteria to exports or using a security checklist that is equivalent to ones used by European Union governments for their Authorized Economic Operator programs. Read more here (subscription required).
 

(ST&R Trade Report)

European Union Trade Commissioner Karel de Gucht announced last week that the Anti-Counterfeiting Trade Agreement will be sent to the European Court of Justice for a ruling on whether the pact is “incompatible in any way with the EU’s fundamental rights and freedoms.” Recent weeks have seen tens of thousands protesting across Europe against ACTA, which opponents fear could result in censorship or other restrictions of civil liberties. Similar concerns in the United States appear to have all but doomed legislation seeking to strengthen online piracy enforcement efforts.

De Gucht noted that the European Commission has passed ACTA to national governments for ratification as well as to the European Parliament for debate and a vote, which is expected this summer. The European Council also adopted ACTA unanimously in December and authorized EU member states to sign it. Press sources note that while 22 of the 27 members have done so, the others have said they will not sign the agreement in its current form, and all members must sign for the EU as a whole to formally become a party.
 

(Industry Week – Agence France-Presse)

President Obama will launch a new enforcement center on Tuesday to more aggressively challenge “unfair” trade violations, including by China, a senior official said.

Obama, who vowed to create such an entity during his State of the Union address and who faces election-year pressure to be tough on Beijing, will establish the Interagency Trade Enforcement Agency by executive order.  The center will “significantly enhance the administration’s capabilities to aggressively challenge unfair trade practices around the world, including in China,” a White House official said on condition of anonymity.  “The president believes that we can’t wait to crack down on unfair trade violations and ensure a level playing field for American workers.” Read more here.