Description
The State of the Manufacturing Industry: 2024 Report
Prepared by Vijay Bhaskar Aleti and Valentina Cardona Duque.
50 pages.
Discover how Canada can overcome critical challenges and position its manufacturing sector for sustainable growth in our latest research report. Drawing on the concept of a “possible trinity,” we explore how increased productivity, manufacturing expansion, and export growth can coexist as vital priorities for Canada’s long-term economic success.
Manufacturing contributes nearly 10% to Canada’s GDP and over 50% to its exports, making it a cornerstone of the economy. Yet, between 2018 and 2022, the sector has experienced stagnation, with its share of GDP in decline. Simultaneously, rising competition from emerging markets and other G7 nations underscores the urgent need for Canada to strengthen its manufacturing capabilities.
This report delves into three core productivity drivers—capital intensity, labour productivity, and multifactor productivity (MFP)—to uncover the underlying factors behind the sector’s challenges. It also analyzes the impact of declining manufacturing exports, which contributed to a $197.8 billion trade deficit in 2022, and highlights the sector’s critical role in balancing Canada’s trade dynamics.
To address these obstacles, the report introduces a three-pronged strategy encompassing workforce development, capital investment, and digital transformation. Our SPARK methodology emphasizes closing skills gaps, enhancing labour mobility, and aligning immigration and education policies with market needs. Complementing this is the PIVOT strategy, which focuses on boosting capital investments and strengthening value chains to improve export competitiveness.
Central to this transformation is the adoption of digital technologies, including advanced analytics, IoT, and big data. These innovations promise to enhance operational efficiency, resilience, and transparency while aligning with ESG principles to meet global sustainability demands.
This report serves as both a roadmap and a call to action for policymakers, business leaders, and stakeholders. By implementing timely and strategic measures, Canada can reclaim its leadership in manufacturing, driving innovation, export excellence, and productivity on the global stage.
