CME survey of Canadian manufacturers

Ady Stefan Calin

Canadian Manufacturers & Exporters (CME) is calling on Finance Minister Chrystia Freeland to propose a comprehensive plan to address major challenges facing manufacturers, including supply chain disruptions, trade protectionism, and severe labour shortages.

“Manufacturers’ issues are Canada’s issues. Without urgent attention paid to the triple threat of supply chain disruptions, Buy American, and the labour shortage crisis, the strength of Canada’s economic rebound is in doubt,” said Dennis Darby, CME President and CEO. “It is critical Finance Minister Freeland develop a plan to tackle these problems in the upcoming Fall Economic and Fiscal Update.”

In CME’s recent survey of Canadian manufacturers, nearly half of companies reported supply chain challenges, while almost two-thirds have seen an increase in raw material costs as a result. These problems are exacerbated by the flooding in British Columbia and ongoing transportation challenges. The number one issue, however, remains labour shortages.

“There are currently more than 65,000 job vacancies in the manufacturing sector. Our survey revealed that most manufacturers are struggling to fill general labour and assembly as well as skilled production (welders, machinists, operators, etc.) positions. These are good, high-paying jobs that are going unfilled. We need the government to address immigration application backlogs and to streamline the Temporary Foreign Worker Program by adopting a trusted employer system,” added Darby.

The outlook for Canada’s manufacturing sector continues to be clouded by ongoing supply chain, workforce, and pricing pressures. The pandemic has disrupted nearly every aspect of the global supply chain, resulting in shortages and price hikes across a whole range of products. 

At the same time, labour market conditions are very tight. Job vacancies in the manufacturing sector climbed to 65,900 in the second quarter of 2021, while the job vacancy rate reached 4.2%, both record highs. These tight conditions threaten to fuel rapid wage growth, which could put more upward pressure on prices. 

Against this backdrop, CME surveyed its members about their firms’ growth prospects, focusing mainly on the extent to which labour and skills shortages are affecting their operations.

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