Canada's overhead crane market, being closely tied to its industrial economy, is expected to remain fairly good this year. It will, however, vary province by province, with the greatest strength being in the oil producing provinces in Western Canada and not as strong in Quebec and Ontario, due to weakness in certain manufacturing sectors there.

Meanwhile, increases in raw materials - most notably steel - are pushing up crane prices, causing some cost conscious customers to do what they can to keep their old cranes going and to consider buying used cranes.

"Demand was very good last year and so far this year it has been very active," says Gilles Laflueur, sales manager for COH Inc., Boisbriand, Quebec. "I hope that it will continue, but I'm not sure how long it will last. We might be at the end of the cycle," he says.

Judy Mellott, president of ACTI, Edmonton, Alberta, believes the strength will continue. She says: "The crane industry in Canada is relatively young, especially in Western Canada. Nevertheless, Canada is growing by leaps and bounds, leading the way in a number of industries and becoming a world recognised exporter."

Over the past 10 years, she says the crane industry in Canada has grown very rapidly for all types of lifting equipment and will continue as the industry demands. "Canada has at this time a very strong, growing and demanding economy," as is seen in the strong Canadian dollar. "It is looking toward growth and investment and is becoming recognised for exporting Canadian made products. Canada presently has a number of large international crane manufacturers who have recognised the Canadian potential and invested by setting up manufacturing facilities and distributors nationwide," Mellott adds.

The economy is slowing a little, observes Guy Archer, vice president of sales and marketing for Pont-Roulant Inc., Laval, Quebec, but not drastically so. "Gross national product growth will probably be closer to 2.3-2.5% this year compared with 5.5% in 2007," he says, adding: "It is still moving."

The Canadian market, Lafleur says, does have a lot of similarities with the US, "but it isn't totally in sync. "We have a lot of strength in metals and energy and housing is still good here. We have good starts as we haven't been hit hard by commercial paper as occurred in the United States."

The Canadian market is obviously much smaller than the US, says Jack Miner, president of Atlantic Crane & Material Handling Ltd., Saint John, New Brunswick. "However," he says, "I believe it to be much more focused in particular segments and not as fragmented as the United States," with mining, energy and other natural resources being the driving force going into the future for Canada. "Crane manufacturers focusing on traditional markets such as automotive and associated support industries might want to revisit their business plan," Miner says.

"A lot has to do with what region you are in," says Darrin Richards, professional engineer at Red Associates Engineering, Edmonton, Alberta. "Western Canada has a lot of heavy equipment industry as well as a high level of activity in the oil sands," he says, and, therefore, activity there is especially strong. Meanwhile, Archer observes, demand for overhead cranes in central Canada, including Quebec and Ontario, is down about 15% this year. "The largest drop is in Ontario, which is the largest manufacturing province in Canada."

One reason for this, one crane executive says, is that this region is affected by the automotive industry "which is on drastic skids." There are some positives in the automotive market, especially with Toyota building a new assembly plant in Woodstock, Ontario, and Honda building a new engine plant in Alliston, Ontario. But the problem, Lafleur says, is that most Canadian auto production facilities are associated with SUVs and other light trucks, which, with high gasoline prices, hasn't been as active in the last few years."

Another problem has been the strong Canadian dollar given that, according to Richards, about 90% of Canada's exports go to the United States, so, not only does US consumer confidence have an impact, but the strength versus the US dollar makes the price of Canadian product more expensive.

There are, however, certain instances that these currency dynamics are actually advantageous to Canadian companies. "If you buy US steel, hoists or parts, they will be cheaper," says a crane executive, who asked to remain anonymous. Most ergonomic cranes come from the United States, says Chuck Snook, vice president of sales and marketing for Provincial Services, Niagara Falls, Ontario, "and I’m not sure anyone truly manufactures hoists in Canada," he says.

Weakness in the forestry sector, which Richards largely attributes to the weak US housing market, is key although environmental issues are also a factor, hurting Quebec and Ontario.

But not everything is terrible in this region of Canada. Archer notes that the region is getting a decent amount of business from Bombardier and other aerospace-related companies located there, as well as from other industries related to aerospace, such as electronics.

"In addition both residential and industrial construction is moving well, and there is a lot of demand for mining, including gold, copper, zinc and nickel in Quebec and in the Sudbury region in northeast Ontario." But he says crane demand is definitely much stronger in the oil producing provinces of Alberta, Saskatchewan and Newfoundland.

"Alberta is among the youngest provinces and one of the fastest growing, richest economies in Canada," says Judy Mellott. "This rapid growth is due to it having one of the largest gas and oil deposits in North America." Also over the past five years or so there has been major development of diamond mines in the Canadian Territories. "It is said that within the next five years Canada will also be recognised as one of the world's major diamond producers," she says. As a result, according to Terry Danderfer, president of Canada Crane Services Inc., Nisqu, Alberta, crane demand in Alberta over the past four years increased tenfold, although it has stabilised a little recently.

In addition the Saskatchewan and British Columbia economy is flying high due to the preparations for the Olympic Games, and crane suppliers there are getting a secondary push from this given the increased need for steel, industry observers say.

Nationwide, Martin says, crane demand this year should be relatively flat with that last year, at a relatively high level.

High raw materials, especially steel, have had an impact on the Canadian crane market as well. "The price of steel is up quite a bit with China buying so much steel (and steel raw materials)," says Archer, who observes that a 5 US ton crane used to sell for $18,000 or $19,000 about four years ago and now sells for $24,000. "Steel has soared. It has doubled in price."

Meanwhile, Snook says, there has not been any increase in willingness to spend on cranes. "People are only spending when they have to. People are trying to keep it as cheap as they can," he says, and that includes concentrating on maintenance. "They are doing what they can to ensure their cranes last 50 years."

"Everyone is hoping for the best in 2008, but no one can tell for sure what will happen," concludes Lafleur. Odds are that it will continue to vary sector by sector and region by region. Canada wide, Martin says, it should not be a declining year, but it will likely be pretty flat, especially considering the rising steel prices.