Report highlights manufacturing challenges

November 7, 2008
by PB2B Staff

Ottawa—Canadian manufacturers will shift away from final assembly, to focus more on building specialized components and providing services such as logistics and supply chain management, according to a report from the Conference Board, a non-profit research organization based in Ottawa.

The study outlined some of the major challenges facing the sector, such as competition from overseas, rapid technology changes, the strong Canadian dollar, and the difficulty of attracting young workers in the midst of a flood of early retirements.

“The manufacturing sector needs to do more to take full advantage of its current workforce through training and learning programs, and do more to successfully recruit younger workers,” said Douglas Watt, associate director of organizational learning and development with the Conference Board.

The report, called “Key Economic and Labour Force Issues Facing Canada’s Manufacturing Sector,” said in addition to improving the skills of its two million workers, the manufacturing sector must keep its aging workers in the labour force longer, through more flexible scheduling and changes to work processes.

It should also restore its image as a rewarding career option for under-represented groups, such as young workers and women, in order to offset retirements.

The report found the manufacturing sector’s share of gross domestic product slipped from 18.4 per cent in 2000 to 15.2 per cent in 2007. Since the start of the decade, overall growth in the manufacturing sector has stalled, even as the rest of the economy expanded. About 300,000 manufacturing jobs have disappeared.

“However, all is not doom and gloom in the sector,” said Michael Burt, associate director, Canadian Industrial Outlook. “Some segments of manufacturing have garnered gains in employment over the course of this decade. The story is even rosier when one looks at production, where nine of the 21 industries have experienced rising production over the course of this decade, and total production is down only slightly.”

Industries such as food manufacturing, fabricated metal products and machinery have grown in both employment and production, while others, such as clothing and textiles, and paper products, declined.

Canada’s largest manufacturing industry, transportation equipment—which includes motor vehicle and aerospace—saw a modest decline.