Canada / Analyst Insights
Top 10 Fastest Growing Canadian Industries
by Administrator
Apr 15 2015

The Canadian economy’s recovery from the recession has had wide-ranging impacts on domestic industries over the past five years. The ten fastest-growing industries over the past five years, measured by average growth in sales per year and compiled from IBISWorld’s 424 Canadian industry reports, feature industries from a variety of sectors, including heavy manufacturing, wholesaling and professional business services.

While each industry exhibited strong revenue growth, some have experienced cyclical growth while others have grown due to more secular trends. For example, the Nonferrous Metal Foundry Products Manufacturing industry has merely recovered from poor performance during the economic downturn and is unlikely to reach prerecessionary revenue levels. In contrast, up-and-coming industries, such as recycling facilities, have flourished due to longer-term shifts in consumer preferences. Similarly, industries such as fertilizer manufacturing have experienced wildly fluctuating demand, while others, such as the Beauty, Cosmetics and Fragrance Stores industry, have grown steadily over the five-year period.

Nonferrous metal foundry products


Five-year annual growth rate: 12.7%

Unlike the broader metal manufacturing sector, the Nonferrous Metal Foundry Products industry has outperformed the economy as a whole during the past five years, although its high growth rate is mostly due to a quick postrecessionary recovery. Despite recent growth, the industry continues to face intense import competition, which has forced many companies out of the industry in recent years. Remaining domestic manufacturers have increasingly offered value-added services such as design support, custom-made castings and metallurgical testing to compete more effectively against low-cost imports. Nonetheless, foreign competition is expected to slow the industry’s growth considerably during the next five years. However, successful Canadian metal foundries will continue to work with domestic customers to design high-precision, customized castings.

Recycling facilities

Five-year annual growth rate: 9.6%

Recycling facilities have flourished during the past five years because of rising environmental consciousness among Canadian households and favourable regulatory conditions. Furthermore, rapid technological advances, such as automated trommels and eddy current separators, have allowed recycling companies to separate, sort and reclaim recyclable materials more effectively and efficiently than ever before. These improvements have reduced operating costs, attracted new industry entrants  and boosted industry employment an average 10.4% per year. Over the next five years, the prices of glass, aluminum and other reusable materials are expected to increase, boosting demand for reclaimed materials from downstream nondurable goods manufacturers. In addition, ongoing government initiatives such as the Waste Diversion Act and the Policy on Green Procurement will continue to drive demand for recycling services.

Fertilizer manufacturing

Five-year annual growth rate: 9.4%

Although the Fertilizer Manufacturing industry has grown overall in the past five years, its performance has been particularly volatile because of fluctuating input prices and erratic demand from downstream agricultural markets. For example, in 2013, a worldwide drop in the price of potash, a key fertilizer input, led to a massive 9.2% decline in industry revenue; however, rebounding prices helped boost revenue by 12.9% in 2014. During the next five years, the industry is expected to outperform the overall economy, although growth will depend heavily on the world prices of potash and agricultural commodities such as soybeans and wheat. Strong demand from the United States, particularly for fertilizers used in corn production, will likely drive rising exports.

canaBeef and pork wholesaling

Five-year annual growth rate: 8.7%

The Beef and Pork Wholesaling industry has undergone a strong postrecessionary recovery during the past five years. Rebounding demand from the industry’s key markets, which include grocery stores and food service establishments, has helped propel the industry since 2010, when decreased consumer spending and low red meat prices reduced industry revenue to just $6.0 billion. However, revitalized consumer spending and rising livestock prices beginning in 2011 helped drive industry revenue to over $8.9 billion in 2014. Although per capita red meat consumption is expected to fall slightly during the next five years, consumers will be more likely to purchase premium meat products, such as grass-fed or organic varieties. Since distributors can sell these products at higher margins, this trend will likely become a primary driver of industry growth.

Truck, trailer and motor home manufacturing

Five-year annual growth rate: 8.6%

Despite strong recovery during the past five years, annual revenue for the Truck, Trailer and Motor Home Manufacturing industry remains well below prerecessionary levels. The industry is highly cyclical in that demand for recreational vehicles (RVs) depends heavily on shifts in consumer incomes and preferences, while demand for trucks and trailers depends on downstream demand from freighting companies. Since retirees are the largest market for RVs and motor homes, industry operators have benefited from an aging domestic population. During the next five years, strong demand from freight operators will likely drive revenue from the industry’s commercial market. However, competition from imported trucks and trailers will continue to pose a threat to domestic manufacturers.

Gold and silver ore mining

Five-year annual growth rate: 7.9%

The Gold and Silver Ore Mining industry performed very well during the first half of the five-year period as the world prices of gold and silver skyrocketed in 2010 and 2011. As a result, industry revenue spiked a whopping 22.9% in 2010 and another 9.0% the following year. However, gold and silver prices have fallen in recent years, including a decline of 15.4% in 2013. Industry operators are expected to continue suffering from higher extraction costs and reduced profitability as the price of gold falls a projected 8.3% in 2015. Accordingly, revenue is expected to increase only 0.5% in 2015. During the next five years, growth is expected to slow as the world price of gold remains relatively stable and the costs associated with environmental compliance continue to rise.

Beef cattle production

Five-year annual growth rate: 7.0%

The Beef Cattle Production industry, which raises cattle for food inputs, has benefited in the past five years from rising livestock prices, strong export volume to the United States and rebounding demand for red meat from domestic households and food service establishments. While per capita meat consumption in Canada has declined slightly during the past five years, rapidly rising cattle prices and strong demand from foreign markets have nonetheless helped drive strong recovery. In particular, cattle prices have increased an annualized 13.9% in the five years to 2015, while exports to the United States, the largest consumer of beef products, have grown 12.0% per year on average. However, beef cattle production has slowed in recent years, and in the next five years the industry is expected to underperform the overall economy.

Real estate investment trusts

Five-year annual growth rate: 6.7%

Like mutual funds, real estate investment trusts (REITs) use pooled capital to purchase, licence or finance income-bearing real estate. Unlike the US market, the Canadian housing market did not crash during the recession, and has actually continued to bloom during the past decade. Despite some speculation of a looming housing bubble, REITs have performed well during the past five years as the value of Canadian real estate has remained relatively high, and the values of both residential and nonresidential construction have risen. However, rising long-term interest rates since 2012 have shifted the investor market from REITs to alternative investments that yield higher returns. Accordingly, industry revenue has waned during the latter half of the five-year period. During the next five years, industry performance will continue to depend on the overall state of the Canadian housing market and other macroeconomic factors.

Beauty, cosmetics and fragrance stores

Five-year annual growth rate: 6.6%

Beauty, cosmetics and fragrance stores sell a variety of personal care products to households and professionals, including hair stylists and makeup artists. During the past five years, industry growth was primarily driven by favourable consumer trends, although broader economic factors such as rising disposable income and increased consumer spending have also helped boost industry performance. Historically, consumers turned to department stores for premium skin-care and cosmetic products, but in recent years have increasingly visited specialty beauty stores that offer a wider range of premium products. This trend is likely to continue in the coming years, although brick-and-mortar beauty stores will face intensifying competition from online beauty retailers. Overall, the industry is expected to outperform the overall economy during the five years to 2020.

Corporate wellness services

Five-year annual growth rate: 6.4%

Corporate wellness services provide workplace programs designed to evaluate and improve the well-being of employees, reduce health-related costs and increase workplace productivity. A widening talent gap in the labour market has encouraged businesses to invest in wellness programs that attract the most talented candidates. Accordingly, demand for industry services has increased in line with rising healthcare costs, increased corporate profit and a stabilizing labour market during the past five years. However, the industry has experienced a massive surge of new entrants, which has heightened competition among operators. Furthermore, corporate wellness providers are increasingly competing with in-house wellness programs and similar services provided by fitness clubs and large health insurance companies. Despite these potential challenges, the industry is expected to continue outperforming the overall economy during the next five years.