IBISWorld releases report on Textile Mills in Canada

Additionally, according to IBISWorld Industry Analyst Hayden Shipp, “the dollar's appreciation had a negative impact on sales of technical textiles and home furnishing textiles, potential growth segments that also declined due to foreign competition.” These trends have resulted in annualized revenue loss of 6.0% during the past five years to about $2.7 billion. Revenue is expected to decline 8.2% in 2013 as foreign competition advances and per capita disposable income growth slows.

Technical textiles and home furnishing textiles are promising for Canadian manufacturers for the same reasons they are driving growth for US textile producers. Technical textiles require well-funded research and development (R&D) programs alongside advanced production techniques, and home furnishing textiles are made entirely through highly automated processes.

Both conditions reduce the competitive advantage of producers located in countries with low labour costs. However, according to Shipp “many of the recent sales of these products in Canada and the United States, where more than a third of revenue is generated, have been made by US firms.” As such, the US textile industry's consistent growth since 2010 has come partly at the expense of the Canadian industry, which reported revenue declines every year of the past decade.

During the next five years, revenue losses are forecast to decelerate to an annualized rate of 3.7%, bringing revenue to about $2.2 billion. The dollar is expected to appreciate at a slower rate than the US dollar, making this industry's products more price-competitive with US technical and home furnishing textiles.

However, the recent and significant investments in R&D and automated machinery by US firms will sustain their competitive advantage for many textiles in their home and international markets.

Furthermore, Chinese imports will continue to grow at a fast pace as China's rising labour costs encourage investment in automation for technical textile and home furnishing textile production. Also, Canadian apparel manufacturers are expected to keep closing their doors, further shrinking the market for industry goods.

IBISWorld