Recreational Boats Industry Profile

Definition of the Industry

The boat building industry comprises establishments primarily engaged in the manufacturing of boats. Boats are defined as watercraft suitable or intended for personal or recreational use.

The North American Industry Classification System (NAICS) code for this industry is 336612 — Boat Building and includes the following products and activities:

  • Boats, manufacturing;
  • Canoes and kayaks, manufacturing;
  • Fibreglass boats, building;
  • Fishing boats, building;
  • Houseboats, building;
  • Hydrofoil vessels (recreational type), manufacturing; and,
  • Yachts, building (not done in shipyards).

Statistical Summary

Recreational Boats [NAICS 336612] — Major Economic Indicators
(millions of $ CAD, employment in thousands)
Economic Indicators 2004 2005 2006 2007 2008 % Change
2007-2008		 CAAGR
Source: Statistics Canada, Trade Data Online.
Definitions: 
CAARG: Coompound Average Annual Growth Rate
Apparent Domestic Market = Shipments plus Imports minus Exports
Manufacturing Intensity Ratio (MIR) = Gross Domestic Product (GDP) divided by Shipments
Import Penetration = Imports divided by ADM
Export Orientation = Exports divided by Shipments
Domestic Market Share = Shipments minus Exports divided by ADM
Apparent Domestic Market 571.6 617,0 900.5 970.2 842.1 -13.2% 10.2%
Shipments 688.8 610.5 754.9 696.2 577.1 -17.1% -4.3%
Gross Domestic Product 330.8 260.2 253.1 311.8 n.a. n.a. -2.0%
Manufacturing Intensity Ratio 48.0% 42.6% 33.5% 44.8% n.a. n.a. -2.3%
Total Imports 501.2 608.7 745.5 873.3 840.5 -3.8% 13.8%
Domestic Exports 618.4 602.2 599.9 599.3 575.5 -4.0% -1.8%
Trade Balance 117.2 -6.5 -145.6 -274.0 -265.0 -3.3% n.a.
Import Penetration 87.7% 98.7% 82.8% 90.0% 99.8% n.a. 3.3%
Export Orientation 89.8% 98.6% 79.5% 86.1% 99.7% n.a. 2.7%
Domestic Market Share 12.3% 1.3% 17.2% 10.0% 0.2% n.a. -64.8%
Labour Productivity 69.0 63.4 59.4 64.9 n.a. n.a. -2.0%
Employment 4.8 4.1 4.3 4.8 n.a. n.a. 0.1%

Economic Overview

Shipments and GDP fluctuated between 2004 and 2008, albeit in opposite directions. Shipments declined by 17.1 percent in 2008, from $696.2 million to $577.1 million. GDP rose from $253.1 million in 2006 to $311.8 million in 2007.

The trade deficit reached $265 million in 2008. The import penetration and export orientation figures reveal a mismatch between consumer preferences and domestic production, as nearly all of the apparent domestic market consisted of imports. Exports fell by 4.0 percent, from $599.3 million in 2007 to $575.5 million in 2008. Imports also fell by 3.8 percent to $840.5 million, and grew at an average annual rate of 13.8 percent between 2004 and 2008.

Major Issues

Because it produces what are generally considered luxury goods, the recreational boats industry may suffer from the consequences of lower disposable incomes and consumer confidence resulting from the current economic recession in Canada and its traditional export markets. Previous growth forecasts of between 4 to 5 percent per year now seem overly optimistic, given this expected slowdown in demand.

The Canadian dollar's recent depreciation may return U.S. demand to Canada. Exports plummeted and imports soared during the years that the Canadian dollar rose to par with that of the U.S. Firms responded to the Canadian currency appreciation by cutting prices (along with gross margins) and outsourcing their operations to the U.S. The domestic market, and the recreational boats industry's response, will determine whether the lower Canadian dollar can reverse the trade balance and contribute to output growth.

The recreational boats industry is regulated by the Canada Shipping Act (CSA) and the Canadian Environmental Protection Act (CEPA). The CSA establishes safety standards, while the CEPA administers guidelines for fuel emissions and the protection of marine habitats. Amendments to these regulations could alter the costs of doing business for manufacturers.

Associations

Industry Promotion

Boating Safety Promotion

Promotion of Sport