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Brighter things on the horizon for Canadian manufacturing?

Published by Steve Coleman on February 16, 2012

Canada's manufacturing sector may be turning a corner.

Sales rose 0.6 per cent in December to $49.9 billion, the fifth increase in six months for Canadian industry.

The gain came in 12 of 21 industries, representing almost two-thirds of Canadian manufacturing output.

With the good month, transportation equipment, food, petroleum and coal products and machinery are among the seven manufacturing sectors that have returned to at least the same levels recorded in October 2008 before the most-recent recession began. Combined, the four represented 51 per cent of Canadian manufacturing in December.

While the world situation is anything but normal, the Canadian economy seems to be settling into a sort of groove, said Jean-Michel Laurin, vice president global business policy for CME. That's despite the bumps in the road in the last few years.

"You could argue that the growth in manufacturing sales is being driven by exports," Laurin said. "The export numbers that came out (Feb. 10) were very strong. Ever since the recession ended, there always seemed to be hiccups."

In the last decade, China decided to become a world power, again, the Canadian dollar started rising and companies that couldn't stay competitive on a loonie at par with the US greenback went out of business. The ones that are around now are stronger for the experience, he said.

Despite debt problems in Europe, deficit difficulties in the United States and uncertainty about whether or not China would be able to maintain its growth, the work Canadian companies have been doing behind the scenes has started to pay off, he said.

Last week's export figures showed Canadian companies were hitting record numbers with countries other than the US. The work done expanding markets is starting to pay off.
Closer to home, businesses have been working on consolidating their North American supply chains.

Canada's resource market has also helped kick the country out of its recessionary slump. The recent uranium deal with China, investments by agri-food businesses and the awarding of shipbuilding contracts for the Canadian government all mean good things could be happening for the country's manufacturing sector, Laurin said.

While it isn't at the point, yet, where the country needs to start worrying about not having the infrastructure or people in place to deal with growth, it is something the country needs to start thinking about.

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