Canadian Occupational Projection System (COPS)

Industrial Summary

Aerospace, Rail, Ship and Other Transportation Equipment

(NAICS 3364; 3365; 3366; 3369)

This industry comprises establishments primarily engaged in manufacturing aerospace products and parts; railroad rolling stock; ships and boat building; and other types of transportation devices (such as military vehicles, motorcycles, snowmobiles, golf carts, bicycles). Aerospace is by far the most important of the four segments, accounting for 75% of production in 2018. Overall, the industry is highly export intensive as around 60% of its production is shipped to foreign countries, largely to the United States which represents 55% of exports. The aerospace segment is the most exposed to global economic conditions as deliveries to foreign markets account for about 70% of total production. The industry employed 84,700 workers in 2018 (4.9% of total manufacturing employment), with 68% in aerospace, 15% in ships and boat building, 7% in railroad rolling stock, and 10% in other types of transportation devices. Employment is mostly concentrated in Quebec (50%) and Ontario (27%), and the workforce is predominantly composed of men (82%). Key occupations (4-digit NOC) include:[3]

  • Aircraft assemblers and aircraft assembly inspectors (9521)
  • Aerospace engineers (2146)
  • Aircraft instrument, electrical and avionics mechanics, technicians and inspectors (2244)
  • Supervisors, other mechanical and metal products manufacturing (9226)
  • Industrial painters, coaters and metal finishing process operators (9536)
  • Labourers in metal fabrication (9612)
  • Welders and related machine operators (7237)
  • Machinists and machining and tooling inspectors (7231)
  • Mechanical assemblers and inspectors (9526)
  • Boat assemblers and inspectors (9531)

The aerospace, rail, ship and other transportation equipment industry experienced two sizeable cycles during the past decade, with contractions in production occurring in 2009-2010 and 2015-2017. Because the industry is highly integrated into global supply-chains and driven by trade, demand for products such as finished aircrafts and related components like engines and parts tend to line up with developments in the world economy. As a result, real GDP in the industry fell markedly during and shortly after the global recession of 2008-2009, before rebounding at a pace exceeding 5% annually from 2011 to 2014, stimulated by the global economic recovery and strong increases in new orders following the accumulation of a pent-up demand during the recession. Output fell again from 2015 to 2017, reflecting uncertain economic conditions resulting from the collapse in crude oil prices, slower economic growth in emerging markets, and trade tensions between Canada and the United States. In 2018, production increased back, in line with the notable acceleration in global and U.S. economic growth in 2017-2018. Large fluctuations in output resulted into slightly negative growth for the entire period 2009-2018, with real GDP declining at an average annual rate of 0.2%. In comparison, employment increased by 0.4% annually, although it also recorded significant fluctuations over the past decade, which generally coincided with the adjustments in production.

Output growth in the industry is expected to accelerate markedly over the period 2019-2028, primarily driven by the substantial increase anticipated in global air travel. According to the International Air Transport Association (IATA)[6], the number of air travel passengers worldwide could double over the next 20 years, up from 4.1 billion passengers per year today to 8.2 billion passengers, which is the equivalent of the global population. More than half of this increase is expected to come from the Asia-Pacific region. The IATA is also committed to a carbon-neutral growth path with the goal of reducing the industry’s net emissions to half their 2005 levels by 2050. To meet the substantial growth in air travel demand and these ambitious environmental targets, global airlines will need to invest significantly in new aircraft over the next decade, boosting growth in the global and Canadian aerospace industry. With profits at historically high levels, largely due to lower oil prices and solid economic growth in recent years, global airlines are in good position to invest in new and more fuel-efficient aircrafts. The order book for Canada’s aerospace industry is increasing and the current order backlog represents over two years worth of production. Growing production and export levels for new aircraft models, such as Bombardier’s new Global 5500 and 6500 business jets, are expected to support the industry, along with the federal government’s commitment to replace the aging fleet of CF-18 fighter jets. However, with global aerospace competition continuously on the rise, and the poles of economic power and air travel demand shifting toward Asia, the future success of the Canadian aerospace industry is being challenged on multiple fronts. To address these concerns, the Aerospace Industries Association of Canada (AIAC) recently launched Vision 2025 to develop a comprehensive strategy and road map to ensure the aerospace industry’s long-term success.

In the meanwhile, the Airbus and Bombardier’s partnership for the A220 (formerly named CSeries), the removal of U.S. tariffs on Canadian steel and aluminum, and the signing of the Canada-U.S.-Mexico Agreement (CUSMA) represent positive developments for exports. The world class sales, marketing and support networks that Airbus brings into the venture are expected to strengthen and accelerate the A220s’ commercial momentum by expanding its order book and providing better access to the European and Asian markets. In August 2019, Airbus opened a second assembly line for this aircraft at its Mobile, Alabama factory. Other segments of the industry are also expected to be supported by solid growth in shipbuilding and rail activity. Several major contracts have been awarded to Canadian businesses for the construction of combat and non-combat vessels for the Canadian Navy and Canadian Coast Guard under the federal government National Shipbuilding Procurement Strategy. The outlook for the fabrication of railroad equipment also looks quite optimistic as the transportation of oil by train is increasing at a rapid pace in North America due to the lack of pipeline capacity. Furthermore, changing demographics, increased road congestion and environmental concerns are all expected to foster global demand for transit systems, including rail and subway. On average, real GDP and employment in aerospace, rail, ship and other transportation equipment are projected to grow at annual rates of 2.0% and 0.8% respectively over the period 2019-2028, a significant improvement relative to the past decade. Productivity growth is projected to account for a significant part of output growth, particularly in the aerospace segment due to fierce competition from Boeing and Embraer.

Real GDP and Employment Growth Rates in Aerospace, Rail, Ship and Other Transportation Equipment

Figure showing the annual average growth rates of real GDP and employment over the periods 2009-2018 and 2019-2028 for the industry of aerospace, rail, ship and other transportation equipment. 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 Aerospace, Rail, Ship and Other Transportation Equipment (%, annual average)
  Real GDP Employment
2009-2018 -0.2 0.4
2019-2028 2.0 0.8

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.

[6]International Air Transport Association, Press Release No 62, October 24, 2018. Back to text.

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