After a year of sluggish domestic economic conditions, the outlook for Canadian manufacturing suggests recovery will be stronger in 2013 and 2014, according to the Canadian Economic Review and Outlook, 2012-2014, released by the Manufacturers Alliance for Productivity and Innovation (MAPI). MAPI notes that Canada’s fortunes should improve along with, but are partly contingent upon, anticipated growth in the United States.

MAPI’s industry forecasting model for 15 industries representing 80 percent of Canadian manufacturing output suggests the recovery will be stronger particularly for durable goods industries.

While five of the eight durable goods industries are forecast to show growth when final data are available for 2012, all eight are anticipated to increase in 2013 and 2014. Motor vehicles production is expected to lead the way this year at 6.3 percent while wood products, at 6.8 percent, and machinery, at 6.4 percent, are predicted to be growth leaders in 2014.

Four of the seven nondurable goods industries should show increases for 2012 while six should improve in 2013 and 2014. The category of miscellaneous products, which includes medical equipment and supplies as well as sporting and athletics goods, is anticipated to grow by 4.5 percent in 2013. Chemicals are forecast to improve by 3.7 percent in 2014. Textiles are an ongoing concern, and expected to show 3.2 percent growth for 2012 but decline by 7.3 percent this year and by 7.6 percent in 2014.

“As a small open economy, Canada faces a number of threats externally that cannot be ignored,” said David Bosclair, MAPI economic consultant and report co-author with Anne Motte. “All major trading partners have pending issues, which, if not resolved positively, will imply lower than expected growth: the U.S. fiscal cliff, growth stabilization in Asia, and the Eurozone debt crisis.”