Video: Canadian Manufacturing Outlook 2014: Leveraging Opportunities, Embracing Growth
From survival to success, companies move from controlling costs to
TORONTO, July 21, 2014 /CNW/ - For the past eight years, manufacturers
in Canada have been fighting an uphill battle. From the downturn of the
US economy and the rising Canadian dollar, to skilled labour challenges
and off-shoring trends - manufacturing here has faced tough headwinds.
Today, times are finally moving in a direction that helps rather than
hinders manufacturers, according to KPMG's Canadian Manufacturing Outlook 2014, released today.
The report reveals that Canadian companies are increasingly turning away
from off-shoring as a cost-saving solution. In 2014, only 14 per cent
of manufacturers planned to source from China, compared with 31 per
cent in 2013 - likewise, plans to source from India were at three per
cent this year compared to 12 per cent last year. Rising energy and
transportation costs, along with added pressure on lead times and
increased inflation in China have made Canada and the US more
competitive as sourcing nations. Reasonable energy costs and the
quality and consistency of products offered here at home have also
driven Canadian manufacturers to look on-shore for their sourcing
This shift to North American sourcing, along with the strengthening US
economy and a dollar that is working to their advantage, allows
Canadian companies to move past survival mode and focus their efforts
on increasing revenue - the top priority for 81 per cent of
manufacturers. Earlier this year, the sector experienced its highest
monthly growth in Canada since 2008, with revenue increasing 1.4 per
cent across the sector. Given the current economic climate, the time is
right for manufacturing companies to tap into current trends and seize
industry opportunities to ensure continued growth and future success.
Skilled labourers and the Canadian workforce - There is no shortage of workers in Canada, but do the people have the
skills for the world of manufacturing? With an international shortage
of skilled manufacturing workers, Canada has the potential for an
enviable home-grown skilled workforce. Schools, governments and
businesses need to continue investing in the right kind of training to
generate much needed on-shore talent.
From incremental to disruptive innovation - Three quarters of Canadian manufacturers engage in incremental
innovation, enhancing existing products and services. To remain
competitive, it is time for these traditionally risk-averse companies
to push further and make breakthrough innovation a part of their
The cost and return of new technology - Leading manufacturing companies realize they must spend money to make
money and are introducing new robotics to the shop floor. But the
potential of new technologies doesn't end there; data and analytics
technology offers invaluable supply chain insight, and may lead to new
ways of producing and providing goods and services.
Manufacturing has a significant influence on Canada's overall economic
prosperity and with the Canada-EU Trade Agreement less than two years
away and expected to add $12 billion to Canada's GDP, manufacturers
must capitalize on opportunities in preparation for the even greater
role they are certain to play in the years to come.
"The manufacturing sector in Canada has undergone a period of survival
of the fittest over the past decade. The strongest companies having
withstood tough times are well positioned to compete locally and
globally. Canadian manufacturers are the busiest they've been in many
years, and it is essential for these companies to remain focused on
future success, thinking ahead rather than simply fighting to survive."
"Canadian companies should leverage their proximity to the US market and
the tightened lead times and reduced energy costs our geographic
location offers. Manufacturers must adjust their focus to activities
here at home in order to capitalize on the industry shift from
off-shoring to on-shoring."
Don Matthew, National Sector Leader, Diversified Industrials, KPMG
CMO Report Website
KPMG - Industrial Markets
@KPMG_Canada - #CMO2014
KPMG on LinkedIn
About KPMG's Canadian Manufacturing Outlook
The Canadian Manufacturing Outlook is an annual survey based on the KPMG
International Global Manufacturing Outlook survey. One-hundred and
fifty-four senior manufacturing executives from across Canada were
surveyed in early 2014, representing a range of industries including:
industrial products, machinery and equipment; automotive;
transportation; food, beverage and consumer goods; technology and
electronics; pharma and biotech; metals; forestry; aerospace and
defense. Seventy-three per cent of respondents indicated that they have
revenues of less than $100 million, with 15 per cent in the $100-$250
million range, and five per cent greater than $1 billion. To access the
full survey report, please visit www.kpmg.ca/cmo2014.
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 155,000 professionals, in 155 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.
Video with caption: "Video: Canadian Manufacturing Outlook 2014: Leveraging Opportunities, Embracing Growth". Video available at: https://www.youtube.com/watch?v=96FuNPxM0ns#t=59
SOURCE: KPMG LLP
For further information:
National Manager, Communications
KPMG in Canada