Canadian sign industry still on upswing despite stagnant U.S. demand

by all | 4 June 2014 10:30 am

[1]The Canadian billboard and sign manufacturing industry continues to recover after the 2009 recession’s negative impact, according to an updated market research report from IBISWorld, which anticipates a revenue growth rate of 1.3 per cent this year.

As advertisers tightened spending amid falling corporate profits in 2009, the company reports, the Canadian sign industry saw revenue decline.

“Retail outlets, automobile manufacturers and other customers also spent less on displays and signage as their revenue fell in the recession,” says James Crompton, an industry analyst for IBISWorld.

To make matters worse, prior to the decline in domestic demand, the Canadian sign industry suffered reduced demand from the U.S., its largest trading partner. And over the past five years, IBISWorld reports these export revenues have continued to fall at an average annual rate of 4.4 per cent, with demand from the U.S. remaining relatively low even as the economy has recovered. As a result, some Canadian companies closed down and exited the industry. Consolidation and new efficiencies, however, have provided a balancing effect, helping many other Canadian sign shops to thrive.

“Fortunately, aggressive cost-cutting measures have resulted in slightly improved profit margins,” says Crompton.

IBISWorld predicts the Canadian industry’s revenue will grow in the next five years as signage customers increase their dedicated budgets for advertising and corporate rebranding.

In particular, they will demand more video billboards and other digital displays, continuing a trend that began in the early 2000s, which will mean higher profit margins for sign manufacturers. As such, sign companies that can offer high-quality digital signage are expected to lead the industry’s recovery.

Source URL: https://www.signmedia.ca/canadian-sign-industry-still-on-upswing-despite-stagnant-u-s-demand/

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