Canada is a relative bright spot in a dark future when it comes to economic momentum, according to a Canadian Chamber of Commerce official.
Machinery, transportation equipment and automotive sectors continue to shine, said the Chamber’s chief economist, Tina Kremmidas, during a state of manufacturing teleconference, though she warns rough waters lie ahead.
“The manufacturing sector going forward is expected to continue to deal with the headwinds that are currently emanating from abroad,” Kremmidas said, referencing the ongoing uncertainty in the Euro Zone and other markets.
Kremmidas was joined by Canadian Manufacturers and Exporters (CME) president and CEO Jayson Myers and BMO Commercial Banking vice-president Cathy Pin, who spoke of cautious optimism going forward.
“We feel it’s still a cautiously optimistic outlook that Canadian businesses have,” Pin said of business confidence.
Still, Canada’s manufacturing sector has shown strength and leadership in recent months, according to Myers.
“We’re seeing some very good numbers coming out of the manufacturing sector,” he said.
Myers made particular note of the nation’s job making, where nearly 115,000 manufacturing jobs were created over the past six months—the most for any similar period.
“Perhaps confounding a lot of the naysayers, manufacturing has created more jobs over the past six months than any other sector of the economy,” he said.
Myers also said overall manufacturing sales across the country have “pretty much recovered” to pre-recessionary levels.
In fact, Canadian factories were at 81 per cent of potential capacity in the first quarter of 2012, the highest level in nearly five years, according to BMO.
“I think it really reflects the fact that this is not only a sector certainly hit hard by the recession … but it’s also one of the most innovative sectors that we have in the economy,” Myers said.
Many Canadian companies are gaining market share in the U.S., according to Myers, despite sectors in that country remaining weak.
Automotive production in Canada has grown nearly 30 per cent, according to Myers, with more than 90 per cent of those Canadian-made products heading to the U.S.
Canadian firms are also gaining new customers through increased exports to Europe, Asia and Latin America, the CME president said.
“As part of that expansion we’re also seeing a lot of investment on the part of Canadian manufacturers and suppliers in new markets,” he said. “Last year was the first year where the sales of Canadian affiliates in markets outside of Canada actually exceeded our exports to foreign markets.”
While growth exists, Myers said manufacturers aren’t out the woods when it comes to drumming up business in unclear global markets.
“Many companies are very uncertain about the market going forward,” Myers said. “Having lived through the past recession, few companies want to be caught having made fairly large investments in employees or in capital until they’re very sure that they’re going to see continued growth in their market.”