Report: Rocky road ahead for Canadian manufacturers
Despite widespread optimism about the future, Canadian mid-sized manufacturers are in for a rocky ride during the n...
Despite widespread optimism about the future, Canadian mid-sized manufacturers are in for a rocky ride during the next few years, according to a new survey.
‘Manufacturing Insights 2005: A Global Comparison,’ released last week by Grant Thornton LLP, indicated that 81% of Canadian mid-sized manufacturers are optimistic about the future. Data from the US, however, revealed something different. Only 63% of US respondents reported being slightly optimistic about the future, while zero respondents reported being very optimistic.
Grant Thornton surveyed over 100 Canadian mid-sized manufacturers and 900 mid-sized manufacturers from other countries.
“With Canadian manufacturers so dependent on the health of the US economy, they can’t afford to ignore the fact that US respondents are indicating that there may be tough times coming,” said Bruce Byford, national manufacturing and distribution sector leader at Grant Thornton, in a statement.
However, due to the current low interest rates and the relative strength of the Canadian dollar, now is a good time for manufacturers to invest in technology and machinery, Byford said. According to the survey, 45% of
Canadian manufacturers plan to increase their workforce in 2005, and 55% plan to invest more money in plants and machinery.
“But Canadian manufactures should look within their organizations to determine how they can increase productivity without capital investment by improving processes, management systems and management techniques,” Byford noted.
As well, Byford said Canadian manufacturers should start expanding their global operations. Right now, about 80% of Canadian exports go to the US, and if Canadian manufacturers continue down this path, they risk benefiting only indirectly from global demand, through dealings with US firms, rather than directly through global markets, the report said.
“With a combined population of over two billion people in China and India, it is safe to say that this may be the most significant growth opportunity facing Canadian manufacturers in recent times,” Byford said.