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Economic Development News

Growing Manufacturing in North America
Posted Jul-04-2012

Growing Manufacturing in North America

Manufacturing has often been touted as the most significant wealth generation engine for Canadian communities. This sector has experienced significant negative impacts associated with the variety of global changes, particularly in the last ten years. However, there is growing evidence that the manufacturing sector is coming back and there are now estimates of up to 300 million new manufacturing jobs forecasted in North America over the next three years.

 

The term “reshoring” is often noted as one of the key tactics and strategies associated with this process. Manufacturing jobs are not necessarily returning to North America, however the growing of new jobs through greater productivity and technology in both Canada in the United States. The jobs initially left the continent due to growing new markets, cheap labour, fuel costs and a fluctuating dollar. Industry has come to this challenge and curtailed expenses, implemented debt reduction programs, completed employment rightsizing and essentially did a reinvention of human capital. Further, with the growing cost of oil, logistics is now shifting in favour of North America. Labour cost deferential is also less reasonable in the growing sectors of manufacturing.

 

Examples associated with reshoring include the Caterpillar operations returning from Japan with as many as twenty value chain suppliers. Michelin and Continental tire are two other examples. Wages in Chatham are now increasing at a rate of up to 15% per year, consistently over the past ten year period. It is the products with less labour and higher value that are first to return to the North American continent. Some quality issues have also brought certain niche products back to the continent.

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