Industry Outlook September 2015
Manufacturing Matters in Canada A $620 billion industry 12% of GDP (18% in 2004) 1.7 million direct employees (2.2 million in 2004) The largest payroll of any business sector Two-thirds of Canada s goods & services exports 80% of private sector R&D 85% of patents commercialized in Canada Every $1 of output generates $3.50 in total economic activity ($3.05 in 2004) The business of providing customer solutions combining the production of goods, new technologies, and services
Billions of Dollars per Month www.cme-mec.ca 60 Manufacturing Sales in Canada 55 50 45 40 35 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Billions of Dollars per Month www.cme-mec.ca 50 Canadian Export Performance 45 40 35 30 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20012 2013 2014 2015 2016
Economic Challenges & Opportunities Opportunities US economic recovery Canadian dollar ($0.72 - $0.78 US) Challenges Financial turbulence Slower growth in China and other emerging markets Low/no growth in other major economies Low commodity prices Slow growth at home Consumers Housing Governments Business Investment
Year-over-Year Percent Change www.cme-mec.ca 4 2 Manufacturing Sales by Province June 2015 1.4 1.2 0-2 -4-6 -3.1-4.4-3.2-1.9-2.5-8 -10-8.6-12 -14-16 -14.1-13.5-13.8 Canada NL PEI NS NB QU ON MB SK AB BC
Manufacturing Sales by Sector Transportation Equipment 18% Electrical Equipment 2% Computers & Electronics 2% Machinery 6% Fabricated Metal Products 6% Primary Metals 8% Non-Metallic Mineral Products 2% Furniture 2% Wood Products 4% Miscellaneous 2% Food 15% Plastics & Rubber 4% Beverage & Tobacco 2% Textiles 1% Clothing 0% Leather Products 0% Paper 4% Printing 1% Petroleum Products 14% Chemicals 8%
Manufacturing Sales by Sector June 2015 Food -3.2 Beverage & Tobacco Textiles 2.3 3.5 Clothing -12.0 Leather Products -5.5 Paper 8.5 Printing 0.9 Petroleum Products -28.2 Chemicals -3.4 Plastics & Rubber 3.2 Wood Products 0.4 Non-Metallic Mineral Products 2.1 Total Manufacturing -3.1-35 -30-25 -20-15 -10-5 0 5 10 15 Year-over-Year Percent Change
Primary Metals Fabricated Metal Products Machinery Computers & Electronics Electrical Equipment Transportation Equipment (Auto Assembly) (Auto Parts) (Aerospace) (Other) Furniture Miscellaneous Total Manufacturing www.cme-mec.ca Manufacturing Sales by Sector June 2015-4.3-7.3-0.3 10.5 3.2 9.4 7.9 3.8 25.3 16.0-0.3 4.6-3.1-10 -5 0 5 10 15 20 25 30 Year-over-Year Percent Change
Long Term Trends More demanding customers looking for solutions More demanding stakeholders governments, investors, public More intense competition Infrastructure investment Social challenges = business opportunities Health, ageing, climate, environment, food, water, energy Accelerating pace of technological change
A Revolution in Manufacturing Technology Industry 4.0 Cyber-physical systems Advanced visualization, modeling, and artificial intelligence Digital, reconfigurable, and integrated automation, sensors, visual systems enabling product/process monitoring & control Internet of Things Internet of Value Big data & quantum computing 3-D printing/additive manufacturing Micromachining New materials Lightweight, bio-nano-based, printable electronics & smart materials New energy Generation, storage, propulsion
New Business Models Focus on customized solutions, not products Software and service-driven specialization New and rapidly reconfigurable design Shorter innovation cycles for more complex products with enhanced functionality Focus on efficient, sustainable use of resources throughout product life cycles Immediate response rapid commercialization Enhanced flexibility Globally dispersed production Dynamic, real-time, globally integrated value creation networks
Strategic Priorities Leadership Specialized, customized solutions Analytics Technology adoption & management Lean People Risk management Collaboration Money www.cme-mec.ca
Critical Policy Issues www.cme-mec.ca Tax policies that facilitate rapid technological change Business growth & new investment Investments that enhance commercialization Procurement, technology demonstration, & risk reduction Data security & global IP regimes Open markets (products, services, investment, people) Seem-less Seamless borders Education & skills for Industry 4.0 workforce Access to reliable, cost competitive infrastructure (transportation, energy, innovation, IT & Telecom)