Estimating the Economic Footprint of the Fast Growing Consumer Health Products Industry
Consumer health products are items that we use every day to maintain health and manage minor ailments. These products include over-the-counter drugs such as pain relievers and allergy medications, and natural health products such as vitamins and supplements. The consumer health products industry, which includes wholesalers and retailers selling consumer health products and manufacturers involved in their production, has seen substantial growth over the last decade and has developed into a notable contributor to the overall economy. The goal of this report is to estimate the industry's current economic footprint and measure its contribution to the Canadian economy.
Compared to overall sales growth, Canada's domestic and international sales of consumer health products have increased rapidly over the last decade. From 2004 to 2014, total retail sales across the country grew at an average annual pace of 3.8 per cent while consumer health products sales increased by 4.2 per cent per year.
In 2014, after a decade of phenomenal growth, domestic retail sales of consumer health products were valued at $5.6 billion, while exports were estimated at $1.5 billion. Between 2004 and 2014, exports of these products nearly doubled - an increase of almost three-and-a-half times the growth in overall exports. The relative performance of the sector is even more impressive compared to Canada's total non-energy exports, which have managed almost no growth over the last decade.
Combined international and domestic sales of consumer health products are estimated at $7.1 billion in 2014, and the industry directly created $2.7 billion in GDP through manufacturing activities and wholesale and retail sales. However, the impact of the industry extends beyond its direct impacts to support many other industries by purchasing products and services for its production process. The industry directly employs 30,300 employees in manufacturing and the wholesale and retail trade sectors, and supports an additional 14,500 employees through its supply chain. These employees also contribute to the economy as they spend their income. Combining these three impacts provides us with an estimate of the total economic footprint of the consumer health products industry in Canada, which is valued at $5.8 billion in GDP and supports almost 57,000 jobs.
The industry generates income for the following stakeholders:
- $3.2 billion in household income;
- $848 million in corporate profits;
- $518 million in personal income taxes;
- $288 million in corporate income taxes; and
- $606 million in sales taxes.
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