Challenges include increased competition, slowing research and
development according to fourth annual survey
TORONTO, July 9, 2013 /CNW/ - Almost half of Canadian manufacturers are
more optimistic than their international counterparts about the global
economy in the next two years but also believe the sector has some
obstacles to overcome to remain competitive, according to a KPMG
Canadian Manufacturing Outlook 2013 - Driving Growth Through Innovation: Solving the "Canadian Dilemma" reveals 46 percent of respondents anticipate the global economy will
experience low growth (between 0.1 percent and 1.9 percent) compared to
20 percent for their international counterparts. Sales growth also
remains the overwhelming priority for 74 percent of Canadian
manufacturers, who are smaller- to medium-sized niche market
businesses, while reducing the cost structure comes in second at 56
Overall, Canadian manufacturers are focused on controlling costs and
maintaining competitiveness which means they are actively reviewing all
aspects of their cost structures including supply chains, distribution,
profitability by market, products and clients.
Canadian manufacturers also face two big challenges in the next 12 to 24
months according to survey respondents: increased competition and
pricing pressures (60 percent) and ensuring the business model remains
competitive (36 percent). Less diversified sources of financing make
it more difficult for national manufacturers to fund growth but they
also need to invest in innovation to remain competitive.
Seventy-nine percent of respondents are focusing on enhancing existing
product lines and services, as opposed to investing in breakthrough
technology (15 percent). Manufacturers are spending on smaller
innovations or tweaking products and processes that do not require
large spending investments.
"The tough economic climate during the past four years forced many
manufacturers, including the smaller, niche players in Canada, to
reassess their plans, focus on the bottom line and control costs," said
Laurent Giguère, National Industry Leader, Industrial Markets, KPMG in
Canada. "Shifting to a long-term and innovative focus will ensure the
Canadian manufacturing sector remains competitive and productive and a
vital part of the national economy."
Other important survey findings include:
Canadian companies recognize increasing opportunities outside of the
United States and Canada: 31 percent expect to increase sourcing from
China and 12 percent from India.
Fifty-three percent of Canadian respondents reduce labour force/costs
and 40 percent exit unprofitable product lines in order to control
Canadian manufacturing is seeing a shortage of skilled workers in the
trades which is becoming an issue within the industry. There is a lack
of skilled talent to manage the supply chain.
Risk management ranks low on the list for Canadian companies, yet if
they are to increase their operations, they must develop strategies and
plans to address supply chain interruptions or quality issues.
About the survey
KPMG's Canadian Manufacturing Outlook 2013 surveyed 173 executives across Canada. Two-thirds are either CEOs or
CFOs and three quarters are responsible for or significantly involved
in their company's sourcing and/or manufacturing strategic
development. Two-thirds represent companies with less than $100
million in annual revenue while eight percent works for companies with
more than $1 billion in revenue.
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the
laws of Ontario, is the Canadian member firm of KPMG International
Cooperative ("KPMG International"). KPMG member firms around the world
have 152,000 professionals, in 156 countries.
The independent member firms of the KPMG network are affiliated with
KPMG International, a Swiss entity. Each KPMG firm is a legally
distinct and separate entity, and describes itself as such.
SOURCE: KPMG LLP
For further information:
National Manager, Media Relations
KPMG in Canada
416 777 8169