Saturday, July 26th9.7°C
22568
21901

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

22439


Recent Trending




Today's Market
S&P TSX15455.04+60.59
S&P CDNX1017.445.79
DJIA16960.57-123.23
Nasdaq4449.564-22.543
S&P 5001978.34-9.64
CDN Dollar0.9247+0.0002
Gold1294.80+4.2001
Oil104.30-0.29
Lumber326.00+0.20
Natural Gas3.783-0.064

 
Okanagan Companies
Pacific Safety0.185-0.015
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07-0.01
Anavex Life Sciences0.275-0.005
Metalex Ventures0.08+0.01
Russel Metals35.36-0.21
Copper Mountain Mining2.820.00
Colorado Resources0.21+0.005
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.05+0.025
Mission Ready Services0.19+0.01

 



22704

FEATURED Property
20171781153 Trevor Drive
3 bedrooms 3 baths
$429,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Take charge of your debt

Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Labour shortage in BC

The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...

_








Member of BC Press Council


22707