Feelings of optimism jump 25% in Q4 for Canadian manufacturers: PwC
TORONTO, Feb. 10, 2012 /CNW/ - More than half of Canadian manufacturers
surveyed in PwC's Fourth-quarter 2011 manufacturing barometer study feel optimistic about the prospects for the Canadian economy over
the next 12 months. With a 25% jump in confidence from the previous
quarter, 90% of respondents expect positive revenue growth for their
own companies, with 10% forecasting double-digit growth.
"Industrial manufacturing CEOs are now focusing on the upside rather
than the downside," says Calum Semple, Consulting Partner, 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 are hoping to increase spending in this
area over the next year."
Leading areas of increased spending are information technology (47%),
research and development (47 %), and new product or service
introductions (37%). "Manufacturing CEOs plan to change their
company's research and development innovation capacity in the next
year. CEOs are using innovation to make their products more
sustainable. Also, with signs of global manufacturing activities on the
rise and U.S. manufacturers showing signs of resilience, there is a
need to upgrade existing systems, associated business intelligence and
introduce mobility as a source of success for firms of all sizes."
Manufacturing Barometer panelists expect international sales to
contribute 66% of their total revenue over the next 12 months.
Corroborating the data from Canadian companies, PwC's report titled Delivering results - Key findings in the industrial manufacturing
industry shows that manufacturing peers around the world are thinking the same.
Nearly three-fifths of industrial manufacturing CEOs said they would
like to develop operations outside of their home markets. The four BRIC
(Brazil, Russia, India and China) are cited as potential opportunities.
"Manufacturing companies looking to explore outside of Canada can
experience a reduction in inventory, support local manufacturing and
there may be foreign exchange advantages for the company," says Mr.
Semple. "Simultaneously, manufacturers must adhere to enterprise risk
management protocols that meet quality and delivery standards, while
staying aware of foreign corruption activities and social
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," says Mr. Semple. "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,"
says Mr. Semple. "Among the respondents planning to hire within the
next year, the most sought-after employees will be production workers
(30%), skilled labour (27%), and professionals and technicians (23%)."
One way the manufacturing industry is responding to the labour barrier
is through workforce development. According to the report, Delivering results - Key findings in the industrial manufacturing
industry, a majority of CEOs think business has a responsibility in this area and
many say they are already making investments to ensure a future supply
of employees. As well, more than half of the respondents indicate
skill development should be a key priority for the government.
For more information, please visit www.pwc.com/ca/industrial-manufacturing and http://www.pwc.com/gx/en/ceo-survey/pdf/15th-global-ceo-survey-industrial-manufacturing.pdf .
Manufacturing Barometer Survey Methodology
PwC's Canadian Manufacturing Barometer is a quarterly telephone survey
conducted by the independent research firm BSI Global Research Inc. It
provides a 12-month outlook for revenue growth, M&A, new investments,
hiring plans and emerging business trends.
Our regular survey panel consists of senior executives from a balanced
sample of large companies in Canada. Ninety-five per cent of the
panelists hold titles such as president, CEO, CFO, VP of finance,
treasurer, controller, internal audit director, or other related
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