MONTREAL, May 17, 2013 /CNW Telbec/ - Despite a challenging global economic environment, the Québec manufacturing sector continued to grow in 2012, as shown in the Baromètre industriel québécois, a study released today by STIQ. As in 2011, 56% of the 400 small and medium-sized (SME) manufacturers that were surveyed experienced at least 5% revenue growth. Similar growth was also maintained in jobs, with 36% of respondents increasing their number of employees by at least 5% in 2012.
"The Baromètre industriel is a valuable tool for getting a precise and up-to-date picture of the situation in the manufacturing industry and being able to act accordingly," said Ms. Zakaïb, who is preparing to set up the new development bank and determine its policies.
SMEs benefited from the dynamism of prime contractors
The year 2012 was very active for many Québec-based prime contractors, especially in industries with highly structured supply chains, such as aeronautics, transportation, mining and electrical energy. The Baromètre industriel québécois shows that manufacturers were able to capitalize on this dynamism and increase their sales volumes with prime contractors. In 2012, 44% of respondents attributed more than 25% of their sales to prime contractors, compared with 36% in 2011. Meanwhile, 49% of respondents saw at least a 5% rise in sales attributable to prime contractors, against 44% in 2011.
A need for greater competitiveness
Growth among SME manufacturers could have been even higher, taking account of the vitality of prime contractors in 2012. To achieve greater participation in major projects and to catch up with the rest of Canada and the United States, Québec-based suppliers must increase their competitiveness, especially by investing in research and development and by acquiring advanced equipment. As in 2011, however, only 55% of those responding to the survey invested more than 2% of their revenues in R&D, while 68% spent more than 2% on equipment purchases, which is far from adequate for competing on world markets.
Skilled labour is also a major factor in productivity: 72% of respondents said they faced recruitment problems (very substantial in 35% of cases), while 47% encountered retention problems. In the medium term, this could harm the competitiveness of Québec-based suppliers, making this an area where action is essential.
Increased specialization and integration of supply chains
To achieve economies of scale and to develop competitive advantages, small and medium-sized manufacturers focused on their areas of specialty. The Baromètre shows that suppliers themselves are increasingly calling upon subcontractors to fill orders from customers (65% of respondents). Some 44% of respondents say they subcontracted in excess of 10% of sales, compared with 36% in 2011. Moreover, with prime contractors seeking to optimize costs by dealing with fewer suppliers, examples of collaboration between SMEs are proliferating. Complementarity in areas of expertise is enabling these groups to offer complete solutions at competitive prices, thus placing them in the role of integrator. This is a highly promising path for the Québec manufacturing sector, which lacks companies operating in this part of the supply chain.
"One of the mandates of the Banque de développement économique will be to identify weak or missing links in the value chain and to support existing or emerging SMEs in filling these gaps," Ms. Zakaïb noted. "Better integration will also help create a group of true medium-sized companies that have a structure-forming role."
For his part, Normand Voyer, Executive Vice-President of STIQ, said: "To deal with the many challenges created by globalization of the value chain, it is vital for Québec-based suppliers to engage in strategic planning to achieve clearer positioning on the market and thereby gain in competitiveness." Only 55% of respondents to the survey said they have conducted this type of exercise.
For complete survey results: Baromètre industriel québécois
With its in-depth knowledge of industry, STIQ conducts an annual survey among 400 small and medium-sized Québec-based manufacturers, assessing tangible and measurable indicators such as revenues, production levels, staff size and investment, with the participation of the Bureau d'Interviewers professionnels (BIP). STIQ, together with consulting firm Raymond Chabot Grant Thornton, then conducts an in-depth analysis of the survey results to provide the business world with a unique picture of the Québec manufacturing sector.
STIQ is an association of Québec-based manufacturers. Its mission is to improve supply-chain efficiency by helping suppliers develop their business, diversify their customer base and obtain business opportunities with prime contractors. It offers professional and technical services for supplier research, evaluation and assistance as well as organizing a number of networking events.
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