Monday, December 22nd5.2°C
24563
23931

Leaner, meaner Canadian manufacturing poised for better times: report

OTTAWA - A new economic report on Canada's troubled manufacturing sector suggests that factories that have weathered the storm have positioned themselves for better times.

The paper from CIBC deputy chief economist Benjamin Tal points out that the sector — one of the most important to Canada's economy and especially Ontario's — has had a terrible time of it since the turn of the century, and even worse since the 2008-09 recession.

Since the recent crisis, manufacturing is still 10 per cent behind pre-slump highs, while one-fifth of firms just simply disappeared.

And it has gone from representing 16 per cent of the economy about 10 years ago to only 12 per cent today. That's a worse record than in the U.S., where the sector has also been in decline.

The sector has also seen a steady decline in workers, dropping another 42,000 jobs during the December 2012 to December 2013 period.

But Tal says the pain has not been for naught. A lot of producers have spent the time not just licking their wounds, but getting leaner and meaner and preparing for the recovery. The weaker loonie, which was responsible for manufacturing's revival in the 1990s, is also helping.

He notes productivity has risen by nine per cent in five years between 2009 and 2013, compared with only about seven per cent for the entire decade of the 2000s. As well, per unit labour costs, while still higher than those in the U.S., are coming down.

"There is no denying that the post-recession leaner and smarter North American sector is better positioned to stop the bleeding," he concludes.

"As for Canadian firms, the long and painful adjustment is starting to pay off, with many industries better positioned to take advantage of the weaker dollar to regain positions in U.S. markets and to better integrate into global supply chain opportunities."

Manufacturing did start the year strongly with a one per cent surge from December, although analysts mostly attributed to the sizable January gain to make-up from the previous month's bad weather-related dip.

Tal forecasts that the industries with the best chance of a robust bounce-back in the next few years will be wood products, followed by primary metal, machinery, aerospace, and computer and electronic suppliers.

At the bottom of the list is petroleum and coal, where productivity improvements have lagged other Canadian manufacturing industries.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14447.19-21.069
S&P CDNX672.16-4.38
DJIA17901.0096.20
Nasdaq4765.684+0.304
S&P 5002070.47-0.18
CDN Dollar0.8589-0.0028
Gold1189.40-6.50
Oil56.50+2.39
Lumber337.70-0.30
Natural Gas3.169-0.295

 
Okanagan Companies
Pacific Safety0.125+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.21-0.04
Cantex0.03-0.005
Anavex Life Sciences0.1712-0.0014
Metalex Ventures0.05-0.005
Russel Metals25.17-0.41
Copper Mountain Mining1.57+0.02
Colorado Resources0.11-0.01
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.02-0.03
Mission Ready Services0.23+0.015

 
24130


24153

FEATURED Property
190178716462 Carrs Landing Road
3 bedrooms 3 baths
$1,850,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


First-time homebuyer mistakes

If you’re on the hunt for your first home and want to have a smooth and successful home purchasing experience avoid these common first-time homebuying mistakes.If you are looking for your first ...


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...

_



24476

24476


Member of BC Press Council


24333