Recent years for the Canadian manufacturing industry have been grim, seeing 42,000 jobs lost in 2013 alone, the number of firms dropping by 20%, and contribution of the manufacturing sector to Canada’s total GDP drop from 16% to 12%.
Thankfully, the light at the end of the tunnel has been getting brighter with every passing day. Productivity has gone up 9% between 2009 and 2013, and per unit labour costs are coming down. Benjamin Tal, CIBC deputy chief economist says that many companies have been positioning themselves to take control of the upcoming year, “There is no denying that the post-recession leaner and smarter North American sector is better positioned to stop the bleeding. As for Canadian firms, the long and painful adjustment is starting ot 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.”
The industries that are forecasted to having adapted the best to the economic recovery are: wood product, primary metal, machinery, aerospace, computer and electronic, miscellaneous, plastics and rubber, and paper. Those in the wood products industry are in the best position for future success. With the dropping dollar, they will retain a top exporter position to the United States. This is a similar reason for the good position of the primary metals industry. In an opposite but just as advantageous standing, those in machinery manufacturing and aerospace industry will see a hefty price increase from imported competition, making the road to recovery much smoother.
Although there is a long way to go, the recovery of the Canadian manufacturing industry is underway, seeing a strong 1% surge from December. Many analysts believe this large growth was due to the make-up from the weather-related dip, but steady growth is still expected.