Canada's paper products industry is in for several years of weakness, partly because consumers are increasingly abandoning paper-based books and switching to the virtual kind, according to a new report from the Conference Board of Canada.

"The transition of information and media from print to electronic format has been going on for years, but until recently the effects were most pronounced for directories and newspapers," said report author Michael Burt, the Conference Board's director of industrial economic trends.

"With the current batch of e-readers and tablet computers, it appears that a critical mass has now been reached and books are likely to follow the same path as newspapers," he said. 

'Demand for paper used in book publishing in North America is under significant pressure'—Conference Board of Canada

About 10 per cent of the books sold in Canada last year were e-books, according to one national survey. The Pew Research Centre estimates that 21 per cent of U.S. adults owned an e-reader as of February 2012. It also found, not surprisingly, that purchasers of e-readers tended to be the most voracious consumers of books. 

"In short, demand for paper used in book publishing in North America is under significant pressure," the report says.

"Mass market paperback books appear to be the segment that has been most affected by this trend thus far, but the effects are likely to accelerate in the coming years as the penetration rate of e-readers continues to rise."

Some U.S. publishers have predicted that e-books will account for half of all sales by 2014, with many e-book reading devices already slugging it out in the marketplace for a share of the burgeoning e-book field.

The Conference Board report says the paper products industry's revenues fell in 2011— a trend it expects will accelerate this year as production slows and prices weaken.

The industry is forecast to shed 5,000 jobs in 2012 and the expectation is that overall employment will drop further from 2013 through 2016.

The report acknowledges that new markets in Asia will provide some growth opportunities, but it says global economic uncertainty is expected to sap demand for pulp and paper in China.