OTTAWA - Canada's pulp and paper industry is expected to struggle thorough another tough year of losses and plant closures next year, the Conference Board says in a report released Wednesday.
The think-tank also estimated the beleaguered industry will record it's fourth consecutive negative year this year, with losses of $435 million in 2008.
And with demand unlikely to pick up soon, next year will only be moderately better with losses totalling $329 million, the report forecasts.
"The entire Canadian paper products industry is struggling as a result of stagnating North American demand and, more recently, because of the global economic slowdown," said economist Valerie Poulin.
Earlier this week, PricewaterhouseCooper reported that losses for Canada's forestry sector -- which includes the pulp and paper operations -- totalled to $552 million in the third quarter. PwC also blamed weak U.S. demand stemming from the housing crisis for the poor performance.
The weaker Canadian dollar is expected to brighten the outlook for the pulp and paper companies going forward, Poulin said, but any turnaround in profits likely won't occur until at least 2010.
The Conference Board says production is expected to fall 6.6 per cent this and decline again next.
As well, it predicts the industry will continue to shed jobs, going from 87,000 last year to 81,500 by 2011 as a result of production declines and closures.
