Industry profile

Definition

The professional, scientific and technical (PST) services industry consists of establishments primarily engaged in activities in which human capital is the major input. These establishments make available the knowledge and skills of their employees, often on an assignment basis.

The North American Industry Classification System (NAICS) codes are:

Statistical summary

Professional, Scientific and Technical Services - NAICS 54
(millions of CDN $, employment in thousands)
Economic Indicators 2007 2008 2009 2010 2011 % Change
2010-11
CAGR
2007-11
Source: Statistics Canada
Definitions: Compound Annual Growth Rate (CAGR)
Gross Domestic Product 59,246 60,209 59,623 59,948 61,565 2.7% 1.0%
Sales 105,790 111,541 108,750 118,961 122,348 2.8% 3.7%
Capital Investment 3,070 3,062 2,944 3,104 2,933 -5.5% -1.1%
Business enterprise R&D 3,154 3,419 3,273 3,490 3,466 -0.7% 2.4%
Employment 1,130 1,189 1,192 1,267 1,309 3.3% 3.7%

Economic overview

In general, the sector is growing. Sales have increased by 13.5% over the period 2007-2011, reaching $122.3 billion in 2011. Employment grew by 13.7% during the same period. The sector was only slightly affected by the recession as GDP decreased slightly by 1% from 2008 to 2009. This sector reflects the wide range of activities; some sub-sectors experienced growth in sales while others declined. In 2011, legal services and accounting, tax preparation, bookkeeping and payroll services experienced a decline while architectural, engineering and related services grew; GDP for the sector grew by 2.7%.

In 2011, the PST services sector consisted of 319,594 establishments. The majority of PST establishments are small businesses. Only 0.3 percent had more than 100 employees. The majority were located in Ontario (42%), Quebec (18%), Alberta (17%), and BC (15%).

In 2011, the largest sub-sectors by share of employment were Computer systems design and related services, Architectural, engineering and related services, and Accounting tax preparation, bookkeeping and payroll services.

Major issues and trends facing the industry

The PST services sector relies on "professional knowledge." Thus, employment is heavily weighted towards high skilled professionals, scientists, engineers, and experts of all types. While some are technology-oriented, others are more involved with administrative, legal and regulatory knowledge.

Professional service firms, led by client demand, are increasingly offering a wider range of services to offer "one stop shopping" and increase profitability. Investments in Information and Communications Technologies have enabled some sub-sectors, such as engineering and information technology (IT) services, to successfully develop export markets.

Companies are increasingly outsourcing corporate functions (such as IT, legal, and accounting services), generating more work for professional services firms.

The basic source of revenue for these professional firms remains hourly billing, but some also bill according to the value of the services they provide. More value billing can be expected as professional service firms become "advisers" rather than just hourly workers.

Associations

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