CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

A murky picture

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by Mary Scianna

Is Canada’s manufacturing sector declining or growing? Based on the proliferation of opinions, you’d be hard pressed to answer the question.

A few months ago I came across a Forbes article online by Tim Worstall (“Slow US Manufacturing Growth Doesn’t Actually Matter Very Much”) that suggested we should stop reporting on manufacturing statistics because it’s a declining sector that isn’t important to economic growth. “…manufacturing is such a small part of a modern economy that changes in the size of the manufacturing sector just aren’t all that important for the economy as a whole.”

More recently I attended a manufacturing forum at McMaster University in Hamilton, ON, about the industry’s renaissance and what we need to do to embrace it. “…what we’re seeing now is a resurgence in manufacturing here in Ontario and across the country with record levels of manufacturing shipments and sales, and record levels of investments in new technology…,” stated Jayson Myers, president and CEO of Canadian Manufacturers & Exporters, one of five panelists at the McMaster University Manufacturing Forum.

The truth, I suspect, lies somewhere in between. Yes, it’s obvious to anyone involved in manufacturing for the past 30 years that the sector has declined in North America. A sector that once represented 40 to 50 per cent of our economy now represents approximately 10 to 15 per cent. And while it may never again contribute close to half of our economic GDP, the sector has indeed witnessed a resurgence, partly through reshoring, as companies begin to embrace new and smarter manufacturing technologies (e.g. Lean processes, digital tools for engineering, design, fabricating, machining, robotics and automation) that enable them to operate competitively in this country.

As for the suggestion by Forbes contributing editor Tim Worstall that manufacturing isn’t important, he’s dead wrong. Just because manufacturing represents a smaller percentage of an economy doesn’t make it less important. Despite his argument that healthcare in the US, for example, contributes more to GDP than manufacturing, healthcare doesn’t create higher value goods and associated new manufacturing technologies (e.g. additive manufacturing, digital tools for processing and managing data) that make an economy stronger. China and India, for example, have not become strong economies because of their healthcare; manufacturing has driven growth. Ron Harper, president of Cogent Power, a manufacturer based in Burlington, ON, and a panelist at the McMaster University Manufacturing Forum, stated our manufacturing industry is missing an “enormous opportunity” to improve our economy: “we make our living selling our stuff [resources] instead of turning them into higher value goods to sell around the world, and it would be a massive improvement to our economic strength and wellbeing.”

Canadian manufacturers must take a leadership role and embrace the tools that will spur growth. Only then will the murky picture of manufacturing in Canada become clear to see future growth. SMT

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