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5 Reasons Why Canadian Manufacturing Keeps Hitting New Highs

5 Reasons Why Canadian Manufacturing Keeps Hitting New Highs

There’s a lot to be excited about whether you’re working in manufacturing on the factory floor, in sales and marketing, or on the senior leadership team.

It doesn’t matter what kind of crises emerge or setbacks occur: You can’t keep a good manufacturer down.

There is little doubt that the industrial sector has experienced many of the same challenges that have affected other markets. Some of these, like the COVID-19 pandemic, may soon be contained. Others, like the devastating forces of climate change, will require far longer to address.

At the same time, some disruptions we’ve seen in the early years of this decade have only served to underscore what a vital role manufacturing plays in our everyday lives. It started when several manufacturers responded to the call for help when the COVID-19 outbreak began by shifting gears and producing PPE.

Then, during periods of extended lockdown, brands of all kinds were counting on manufacturers to keep up with demand for products as they focused on providing them via e-commerce.

The additional strain on the global supply chain, meanwhile, meant many manufacturers had to work with extreme agility to ensure everyday staples remained available to consumers.

All the grim headlines have probably affected morale within many manufacturing companies. Employees who were accustomed to working the same way for eons may have suddenly needed to adopt new business processes and use new tools.

This makes it especially important that we pay attention to some more encouraging signs that the industrial sector is not only set to survive but potentially experience new levels of growth. The development of new technologies that are purpose-built to assist manufacturers is an obvious example. Salesforce for Manufacturing is already helping firms create more accurate forecasts, manage inventory and more.

While we’re not completely out of the woods yet on many fronts, it’s possible manufacturing is turning a corner:

1. Sales are rising up and to the right

Economists tend to judge the health of an industry with the same measurement that companies use themselves: customer demand.

Earlier this year, the country’s industrial sector marked an impressive four months of sales increases. Data provided by Statistics Canada reported a staggering $64.8 billion of manufacturing sales in January, based on strong performance across oil and gas producers, manufacturers of wood products and more. This represents an overall lift of 13.4% at the beginning of the year.

2. Factories are getting busy again

Consumers were no doubt excited to go to the movies and their favourite stores as the Omicron variant subsided, but easing pandemic restrictions was particularly transformative for manufacturers.

A good way to quantify this is by looking at the IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI), where a reading above 50 suggests the industrial sector is growing.

The most recent IHS PMI offers good news in that regard with a reading of 56.6 in February. This was the highest level since the previous November, and was attributed in part to working conditions in many factories and plants welcoming workers back.

3. Sustainable manufacturing is attracting government investment

A recent article in Canadian Manufacturing reported on $7 million in funding that was awarded by a B.C. ministry to a pair of companies demonstrating leadership in clean energy and sustainable production.

This follows similar moves by the federal Ministry of Agriculture and Agri-Food to earmark almost $18 million for 60 projects that involve manufacturing equipment for sustainable farming.

Then there’s NGen, the industry-led organization leading Canada’s Advanced Manufacturing Supercluster. The organization recently said it was making a $76 million commitment to fuel the manufacturing of zero-emission vehicles (ZEVs).

Making the transition from a dependency on fossil fuels is obviously a tall order, but public sector backing could go a long way towards making it happen faster and easier.

4. The hunt for new manufacturing is well underway

Hiring freezes and layoffs were a common but unfortunate side effect of the events that began in early 2020. If you had asked the heads of HR in most companies what their short-term plans around headcount were, the answer might have sounded dire. Unless, of course, they were with a manufacturing firm.

Just look at the statistics from the ManpowerGroup Employment Outlook Survey, which takes the pulse of businesses across a wide range of sectors. It found that manufacturers in Canada had the brightest outlook on hiring, with 33% planning to increase the number of people on payroll.

This puts manufacturing ahead of other sectors including IT/telecom, banking/finance and wholesale/retail trade.

5. The rebound in manufacturing is spreading across Canada

Experts might often look to the country’s largest and most populated provinces as the bellwether for the manufacturing sector’s future. However the industry’s new heights will be scaled well beyond them.

Speaking to local media, the divisional vice-president for industry association Canadian Manufacturers and Exporters (CME) in Newfoundland described the sector as returning to “pre-pandemic” levels of activity.

This is coupled by the fact that, after three years away, the local industry is bringing its brightest minds together again at a conference to build upon recent successes.

None of this is to ignore the challenges Canada’s manufacturing factor continues to face. Producers of every kind need to be wary of economic forces such as inflation, ongoing supply chain constraints and more.

To an extent, though, there’s a lot to be excited about whether you’re working in manufacturing on the factory floor, in sales and marketing, or on the senior leadership team.

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