Modest manufacturing growth appears likely

Before we all turn into Chicken Little and say the sky is falling, we’d better look up.

Growth is actually expected in Canada’s manufacturing sector this year. But just don’t expect to be overwhelmed by it.

According to insurer and risk management firm QBE, manufacturing’s contribution to the Canadian economy is expected to increase 1.1 per cent this year. However, diving into the numbers shows that this growth will likely be driven mainly by the metal products sector.

The past decade has seen a slow and steady decline in the way the manufacturing sector affects the Canadian economy. Over the last 10 years, the number of Canadians employed in the manufacturing sector and its contribution to the nation’s gross domestic product (GDP) has fallen. In the early part of that 10-year timeframe, manufacturing was, perhaps unsurprisingly, outshined in growth by both the services industry and the natural resource sector.

Today, manufacturing employs about 9 per cent of Canadian workers and is responsible for about 9 per cent of GDP.

According to QBE, the largest contributions to GDP from the manufacturing sector last year came from food manufacturing (14 per cent), transport equipment (12 per cent), chemicals (11 per cent), machinery (9 per cent), and metal products (7 per cent).

The fastest growing sectors inside of manufacturing this year are expected to be transportation equipment manufacturing, primary metal manufacturing, fabricated metal product manufacturing, and machinery manufacturing. That’s encouraging.

Growth is still expected even though one-third of manufacturers polled in Q3 of last year said that a skilled labour shortage limits their ability to meet their suppliers’ demands.

If a labor shortage is the only thing getting in the way of the sector’s growth, we need to end it. In the meantime, start thinking about ways to free up workers from labour-intensive productivity drains.

This can take many forms, including a capital investment in complex multiaxis equipment and the addition of automation (even simple automation like a bar feeder).

Another way is to really lean into kaizen.

Lean manufacturing focuses on reducing waste, improving workflow, and continuous improvement. Looking at your shop through these three lenses should be enough to identify those pesky productivity sinks.

Reduce your waste and improve your process. It sounds easy, but it’s not. But like Chinese philosopher Lao Tzu said, "The journey of a thousand miles begins with a single step."