LOS ANGELES - The $2.6 billion Canadian cabinet and vanity manufacturing industry is expected to experience a short term boost by 2018 following a rough five years.

The economic recession, slow residential housing expenditures and the fact that imported cabinet products are cheaper are to blame for the rough patch, according to a new report released by IBIS World.

"Canadian wood furniture manufacturers have faced increasing competition, particularly from countries with low labour costs, such as China and Mexico,” IBISWorld industry analyst David Yang said.

In the five years leading up to 2018, Canadian cabinet and vanity sales are prloected to grow due to recovering residential housing expenditures. In particular, home renovation and home-improvement spending are expected to strongly increase during the period, IBIS World said.

Industry growth will, however, be constrained by rising levels of imports, especially as the Canadian dollar strengthens. Imports are forecast to increase during the period, making up an increasing share of domestic demand. Consequently, exports' share of industry revenue is anticipated to fall.

On the other hand, cost-cutting efforts are anticipated to marginally bolster profit margins in the five years to 2018, though this growth will not be enough to prevent long-term industry decline.

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