Auto industry 'single-handedly' lifting manufacturing sector
Record North American auto sales and production numbers are "reviving the Canadian auto industry," according to the latest Scotiabank Global Auto Report.
The report claims the auto industry is propping up Canadian manufacturing as a whole, with auto parts shipments leading the charge, reaching levels not seen since 2006, while employment in the sector is growing at its fastest pace since 2000.
"The auto industry is single-handedly lifting Canadian manufacturing activity and non-resource exports out of the doldrums experienced during much of 2015," Scotiabank senior economist and auto industry specialist Carlos Gomes said in a statement accompanying the report.
"In fact, the auto sector's share of overall manufacturing activity is now at the highest level since 2003, and exports have been so strong that the sector has swung to trade surplus in early 2016."
Gomes said the auto industry has also reclaimed its title as Canada's largest exporter, overtaking the oil and gas industry, which has experienced a major slowdown in recent years.
Auto parts are playing a big role in the rebuilding process, with the report pegging a 16 per cent jump last year after a 14 per cent increase in 2014.
The Canadian auto parts sector has seen its share of global exports increase to 3.1 per cent, its highest level since 2008.
Auto parts employment in Canada has also increased, with a five per cent year-over-year jump the largest since 2000 and double that of the United States, according to Scotiabank.
It claims new vehicles built in Canada, the U.S. and Mexico now contain Canadian-made parts worth nearly US$1,600 compared to US$1,437 in 2013.
Canadian vehicle assemblies jumped eight per cent in the first quarter of 2016, climbing to the highest level since mid-2012, the report claims.
And with further growth projected in light truck production, including crossovers, Canadian vehicle output is estimated to jump 12 per cent year-over-year next quarter—nearly ten times the increase projected for facilities in the rest of North America.
The Scotiabank report stands in stark contrast to a report published by the Conference Board of Canada in January, which projected no growth in the Canadian auto industry over the next five years.
