Canadian manufacturers optimistic about the future: KPMG report

Globalization and strong dollar call for at-home innovation

TORONTO, July 24, 2012 /CNW/ - Despite a sluggish economic recovery, 85 percent of Canadian manufacturers are optimistic about the future of their business over the next two years, finds KPMG's third annual survey of Canadian Manufacturers. KPMG's Canadian Manufacturing Outlook 2012: Push and Pull - Reducing Costs and Investing in Innovation found Canadian manufacturers are more optimistic than last year (nine percentage points) and share a more positive outlook than that of their global counterparts.

"Our survey tells us that Canadian manufacturers are confident in their business strategies, but investing in innovation, increasing efficiencies and managing risk are top-of-mind moving forward," said Laurent Giguère, National Industry Leader, Industrial Markets, KPMG in Canada. "As smaller, niche players operating with a strong dollar, Canadian companies realize they need to innovate in order to compete with lower-cost global producers."

Innovation to drive future growth

Canada has not seen disruptive, game-changing innovation, nor has it experienced process innovation that can revolutionize and drastically improve productivity in the manufacturing sector. Despite the lack of recent transformation, manufacturers do realize the impact innovation can have on their business and, more specifically, their bottom line - more than 60 percent of Canadian respondents say the next wave of transformational innovation is underway or will be within the next 12 to 24 months.

Doing more with less

Canadian manufacturers are striving to increase productivity and manufacture products at the lowest cost to stay competitive. In today's increasingly global market, labour costs continue to be a priority for Canadian companies - half of respondents say reducing labour costs is the cost control method they expect to be most important over the next 12 to 24 months.  Coming in at number two is exiting unprofitable product lines and/or geographies (46 percent).

Managing risk in an uncertain world

As the number of Canadian manufacturing companies doing business in emerging markets rises, their investment in risk management strategies should increase as well - however, this is not the case. Canadian respondents plan to spend relatively less on risk management than their global counterparts in 2012. Currently, only five percent of Canadian respondents use scenario/simulation planning to address aspects of risk management and 17 percent of Canadian respondents "don't know" how they're going to identify risk in their supply chains over the next 12 to 24 months.

About the survey
KPMG's Canadian Manufacturing Outlook 2012 surveyed 150 participants from across Canada. The majority, 70 percent, of respondents were C-level executives and 79 percent are responsible or significantly involved in developing their company's sourcing/manufacturing strategy. Companies with annual revenues of less than $100 million make up 62 percent of the respondent base and 4 percent are companies with revenues exceeding $1 billion.

About KPMG
KPMG LLP, an Audit, Tax and Advisory firm ( 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 145,000 professionals, in 152 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.

Follow @KPMG_Canada for more facts from KPMG's 2012 Canadian Manufacturing Outlook.


For further information:

Kathleen Killen
Senior Manager, Media Relations
KPMG in Canada
(416) 777-3447


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