SHOP: What are you expecting in terms of business conditions in 2024?
HASROUNY: This year has been very quiet for equipment sales up until recently. Even before the end of last year sales were starting to cool off and the first six months of this year it was like a drought. I believe most equipment distributors were struggling with sales. Everybody was busy quoting and there was interest from customers but the fact that getting financing was more difficult, the prices of equipment were still high, and you had to pay extra on the interest rate, stalled a lot of the momentum that was created for new equipment sales after COVID. But for the past two months things have started to swing the other way. Shops are finding themselves in situations where they have no choice anymore and they have to pull the trigger on orders. They have commitments they need to meet. I think as suppliers we have also become more creative. A lot of us are finding ourselves partnering with financing companies to help us secure financing at better rates for our customers. We have to take more risks in order to help some of our customers reach their goals.
SHOP: This year has been a mixed bag for manufacturing. Heading into 2024 how would you describe the state of manufacturing?
HASROUNY: Shops aren’t sure what to expect for 2024. Look at Windsor for example. It was bad for a year, with things really slowing down in the automotive industry and EVs still not in full swing. New programs were not being released. But we can see now that Windsor has movement over the last two months. Usually, July and August are slower months but now it’s very busy, projects are on the table and they’re moving forward. It’s a good sign.
SHOP: What is the most important issue that still needs to be addressed?
HASROUNY: I think Canada suffers from being an expensive manufacturing hub. Look at industrial rents and how they have increased since COVID. When you have to maintain a shop that now is costing you 25-30% more just to maintain the property, that’s a big cost. There is a shortage of skilled labour and everybody is taking operators from the competition and paying them more. Add to that the increased cost of borrowing, higher equipment prices, higher materials prices, increased transport costs. Compounded this is causing a lot of pressure. As we bring more immigrants in, the cost of living won’t be going down. It will be going up and so will the cost of manufacturing. We need to become more specialized in manufacturing. We need to get into higher technologies. As long as we stay in high tech manufacturing, we will survive. We need to make sure shops can reduce their overhead costs and be competitive.
SHOP: Your advice to our readers for 2024?
HASROUNY: Think big. Don’t be small minded. Don’t think that whatever worked for you the last 30 years is going to continue working for you for the next 10 years. You have to think in a way that is all focused on efficiency, better technology, automation. Our saving grace will be in becoming a country where job shops are high tech and it becomes a no brainer to want to manufacture here. You go to some shops in Windsor, and they are state of the art. Once you are established as a high-tech shop, you’re flying. If you continue having a small-minded mentality, you may survive for a while but not long term. As suppliers we also have to think big and be proactive in things we bring to the table for our customers.