More than half of Canadian manufacturers feel optimistic about the prospects for the Canadian economy over the next 12 months, according to a new survey by professional services firm PwC Canada.
The company's fourth-quarter 2011 manufacturing survey showed a 25% jump in confidence from the previous quarter, with 90% of respondents expected positive revenue growth for their own companies, and 10 per cent forecasting double-digit growth.
"Industrial manufacturing CEOs are now focusing on the upside rather than the downside," said Calum Semple, a consulting partner with PwC. "Across the board we're seeing Canadian manufacturers with positive projections associated with company growth, international sales, and spending trends."
One area of concentration is operational spending. Eighty per cent of Canadian respondents said they hoped to increase spending in this area over the next year, the survey showed, with leading areas of increased spending are information technology (47%), research and development (47%), and new product or service introductions (37%).
Nearly three-fifths of respondents said they would like to develop operations outside of their home markets, with Brazil, Russia, India and China cited as the four main potential opportunities.
At the same time, foreign market competition is cited by 43% of Canadian manufacturers surveyed as a barrier to growth. To reduce this barrier, initiatives such as new strategic alliances and joint ventures in markets abroad are on the minds of companies this year.
"An example of this is Canada's Magna International Inc.'s application to produce 300,000 vehicles annually in Russia," Semple said. "Its current Magna Steyr operation in Austria is the largest contract manufacturer in the world, assembling vehicles for Mercedes -Benz, PSA Peugeot, Minis for BMW AG, and others."
Other barriers to business growth highlighted by manufacturing companies include concerns over oil and energy prices (53%) and monetary exchange rate (47%). "Similar to last quarter, Canadian manufacturers are looking to hire and the lack of qualified workers remains a concern," Semple said. "Among the respondents planning to hire within the next year, the most sought-after employees will be production workers (30%), skilled labor (27%), and professionals and technicians (23%)."