GROWTH MAKES A COMEBACK IN THE MANUFACTURING INDUSTRY

MONTREAL, May 10 /CNW Telbec/ - After the hardships of the economic crisis, there are now encouraging signs of growth in Quebec's manufacturing industry.  Indeed, according to a study recently published by Sous-Traitance Industrielle Québec (STIQ), over 50 % of Québec-based SMEs in the manufacturing industry have increased their yearly revenue by at least 5 % in 2010. Furthermore, the majority of theses companies (77 %) operated at over 50 % of their capacity, a 10 % increase from 2009.

STIQ presented today the results of the Baromètre industriel québécois, a comprehensive study conducted with 400 Québec-based SMEs in the manufacturing industry. The study shows that SMEs seem to have regained confidence in the future: 64 % of interviewed SMEs are investing over 2 % of their yearly revenue in the acquisition of new production equipment, which is higher than the growth of the Canadian GDP in 2010.

Such growth can be explained by various strategies adopted by SMEs, particularly customer diversification strategies. This could explain why 4 of 10 of participating SMEs attribute over 10 % of their sales to new customers and why less than 10 % of the SMEs concentrate over 75 % of their revenue with three major clients. Such results are indeed positive ones when we consider that a well diversified customer base in various market segments reduces commercial dependency and protects SMEs from industry and market fluctuations.

However, notwithstanding such positive results, the study also shows that there are still many challenges left for the manufacturing community.  STIQ thus noticed that 61 % of interviewed SMEs win less than half of all requests for quotes. This could be explained in part by the fact that many major manufacturers have delayed their projects due to the economic downturn and that these major customers tend to shop around more than they used to, as they are themselves facing pressure for cost reduction. There could, however, be other structural problems which could explain this, as pointed out by Normand Voyer, Executive Vice-President of STIQ, an association directly involved with Quebec based manufacturers.

According to Mr. Voyer, « such a low success rate could be explained in part by the ever increasing demands of OEMs and major manufacturers and the difficulty of Quebec based manufacturing SMEs in meeting these new and demanding requirements ». Mr. Voyer argued that SMEs often have a hard time estimating their costs in a cost competitive market and do not possess the financial resources to participate as long term partners in complex projects which is what OEMs will require for new projects.

In addition, SMEs seem to be lagging behind in the implementation of the industry's best practices and continuous improvement principles such as Lean Manufacturing. Mr. Voyer concluded that this lag affects the productivity and competitiveness of Quebec based manufacturing SMEs on a global level.

STIQ conducted this study in order to provide a new picture of the industry and wishes to pursue this initiative on a yearly basis to measure the evolution of this key segment of Québec's economy.

Methodology
With its in-depth knowledge of Quebec's manufacturing industry and the help of Bureau d'Interviewers Professionnels (BIP), STIQ performs a yearly survey with 400 SMEs. The study is based on original and measurable indicators.  This year, for the first time, STIQ has analyzed these indicators in collaboration with experts from SECOR, thus providing a fresh look of the manufacturing industry.

Sous-Traitance Industrielle Québec
STIQ is an association of Quebec based manufacturers dedicated to the improvement of the supply chain efficiency and doing so by helping suppliers develop their business, diversify their customer base and identify business opportunities with prime manufacturers. STIQ offers professional and technical services for suppliers' research, evaluation and assistance as well as organizing many networking events.

SOURCE SOUS-TRAITANCE INDUSTRIELLE QUEBEC (STIQ)

For further information:

Michelle Vyboh
Communications Manager
Sous-Traitance Industrielle Québec (STIQ)
Phone: 514 875-8789
E-mail: mvyboh@stiq.com
Website: www.stiq.com

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SOUS-TRAITANCE INDUSTRIELLE QUEBEC (STIQ)

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