Rising costs to mute profits for transportation sector in 2011: report

OTTAWA, Ont. — Rising labour and operating costs will lower profits to less than $5 billion for the transportation and warehousing sector this year, according to the Canadian Industrial Profile’s Autumn 2011 issue.

The report is published by The Conference Board of Canada in association with the Business Development Bank of Canada (BDC). It provides a five-year (2011-2015) production, revenue, cost and profitability forecast for six industries each quarter.

The report noted that while the industry as a whole has recovered from the recession, the rebound varies among the different modes of transport. The trucking, air transportation and rail segments have posted strong growth, and the pipeline transportation segment is forecast to record its first increase in output in five years. However, the ongoing economic weakness in the US is limiting demand for water transportation services.

“Several industries profiled in this outlook have recovered from the 2008-09 recession. But the prospects for continued growth are muted because of weak consumer and business confidence, as well as high household debt levels,” said Michael Burt, associate director of industrial economic trends.