Canadian Occupational Projection System (COPS)

Industrial Summary

Computer, Electronic and Electrical Products

(NAICS 3341-3346; 3351-3359)

This industry comprises establishments primarily engaged in manufacturing information and communications technology (ICT) devices, such as computers and peripherals, telecommunication and audio-video equipment, navigational and measuring instruments, as well as electronic components for such products. It also comprises establishments involved in manufacturing products that generate, distribute and use electrical power, such as generators, transformers, switchgears, batteries, wires, electrical motors and household appliances. ICT is the most important of the two segments, accounting for about two-thirds of production in 2018. Overall, the industry is highly export intensive, with about 75% of its revenues coming from abroad, largely from the United States which accounts for 70% of exports. The industry is also largely exposed to import penetration with a substantial share of domestic demand met by imports, mainly from the United States, China and Mexico. It employed 111,200 workers in 2018 (6.4% of total manufacturing employment), with 63% in the ICT segment. Employment is mostly concentrated in Ontario (46%) and Quebec (31%), and the workforce is predominantly composed of men (72%). Key occupations (4-digit NOC) include:[3]

  • Electronics assemblers, fabricators, inspectors and testers (9523)
  • Assemblers and inspectors, electrical appliance, apparatus and equipment manufacturing (9524)
  • Electrical and electronics engineers (2133)
  • Supervisors, electronics manufacturing (9222)
  • Supervisors, electrical products manufacturing (9223)
  • Machine operators and inspectors, electrical apparatus manufacturing (9527)
  • Computer programmers and interactive media developers (2174)
  • Electrical and electronics engineering technologists and technicians (2241)

While the industry posted impressive growth in the late 1990s, largely driven by the strong performance of the ICT segment, production and employment fell almost continuously after the dot-com bubble burst of 2001. This reflects various challenges faced by the industry during that period, including the market saturation for ICT products in the early 2000s (largely due to an over capacity in the telecommunications infrastructure); the global recession of 2008-2009; the strong appreciation of the Canadian dollar (prior to 2014); and most importantly, the intensification of international competition on both domestic and foreign markets. Canada’s market share in the United States has been declining since the early 2000s, while imports from China have more than doubled in the last ten years. Producers are increasingly relocating to low-cost countries and China’s market share in Canada has been exceeding that of the United States since 2010 and is now accounting for more than 45% of Canadian imports of ICT products. Sales from the wireless communications segment were particularly affected by BlackBerry’s difficulties and decision to stop making phones, in part because of intense competition from Apple’s iPhone and Google’s Android supported devices. On average, real GDP in the industry contracted at an annual rate of 1.4% over the period 2009-2018, compared to a more severe decline of 3.2% for employment, as a result of major restructuring in the industry. However, all of the declines occurred prior to 2014 as production increased back in recent years, allowing employment to stabilize. The rebound in production primarily reflected higher exports, most likely attributable to a weaker Canadian dollar and solid economic growth in the United States.

Renewed growth observed in the industry’s output in recent years is expected to persist over the projection period, largely driven by steady increases in business investment in North America and growing opportunities brought by new technologies. After posting mitigate growth over the past decade, business investment in machinery and equipment (M&E) is expected to strengthen markedly in Canada and continue to grow at a solid pace in the United States, boosting domestic and foreign demand for ICT products which rely heavily on corporate spending. High replacement rates and perpetual innovation for many ICT products are also expected to keep driving consumer interest in new products. New technologies, such as mobile and cloud computing, the Internet of Things (IoT), 5G network, advanced robotics, machine learning and artificial intelligence, are projected to result in growing global demand for ICT products. With electronics being increasingly embedded in a variety of consumer products, such as autos and appliances, and considering the proliferation of applications for smartphones and other ICT devices, the design and manufacture of sensors, measuring, control and navigational instruments represent a key source of growth for the industry.

The need to reduce carbon emissions is also expected to drive the demand for greener, more energy-efficient buildings. Smart building automation systems rely on computer and electronics manufacturers to provide the various instruments and devices that can regulate and control buildings’ lighting, heating, ventilation and air conditioning. Canada has fared well in this market segment in recent years, especially in the United States, as its competitiveness was boosted by innovative products that stand out relative to those of other competing nations. Those developments, combined with the relatively low value of the Canadian dollar and the signing of the Canada-U.S.-Mexico Agreement (CUSMA) should continue to stimulate exports in the industry and attract foreign investment. The electrical segment of the industry is also expected to benefit from the growing popularity of electric vehicles, which, according to the International Energy Agency[5], is projected to grow from 3 million vehicles today to 125 million by 2030. However, developing and maintaining intellectual property is critical for the industry’s success, as it accounts for three-quarters of total investment in the industry. In light of numerous and promising opportunities, real GDP growth is projected to return to positive territory over the period 2019-2028, averaging 1.9% annually. Renewed growth in production is expected to result in a marginal rebound of 0.3% per year in employment, although most of the increase in output should come from additional gains in productivity resulting from increased automation within the industry and the shift toward higher value added products.

Real GDP and Employment Growth Rates in Computer, Electronic and Electrical Products

Figure showing the annual average growth rates of real GDP and employment over the periods 2009-2018 and 2019-2028 for the industry of computer, electronic and electrical products. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial projections.

Text Version of Figure Real GDP and Employment Growth Rates in Computer, Electronic and Electrical Products (%, annual average)
  Real GDP Employment
2009-2018 -1.4 -3.2
2019-2028 1.9 0.3

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial projections.

[3]Key occupations for manufacturing industries in general also include: Manufacturing managers (0911); Construction millwrights and industrial mechanics (7311); Material handlers (7452); Shippers and receivers (1521); Transport truck drivers (7511); Industrial engineering and manufacturing technologists and technicians (2233); Industrial electricians (7242); and Industrial and manufacturing engineers (2141). Back to text.

[5]International Energy Agency, Global Electric Vehicles (EV) Outlook 2018, May 2018. Back to text.

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