Ontario Manufacturing May Have Turned Corner

January 3, 2011, 1:40 PM EST


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Ontario's hard-pressed manufacturing sector added jobs for the first time since 2004, and could see further modest growth in the years ahead, according to a new report from the Ontario Manufacturing Council.

The provincial manufacturing industry added over 10,000 new jobs in the first 9 months of 2010.  Shipments rose 14%, and exports rose 15%.

The study also provided details on the degree to which other sectors of the economy depend on the province's manufacturing base for their own sales and business opportunities.  According to the report, $1 billion in new manufacturing exports generates some 16,500 jobs - most of which are located in non-manufacturing sectors (like construction, trade, transport, professional services, and even in public services).  And the provincial and federal governments receive fiscal benefits exceeding $300 million each from $1 billion in new manufacturing exports (and associated spin-off benefits).  Nine non-manufacturing sectors in the provincial economy depend on manufacturing for 15% or more of their total sales.  Clearly, the future of manufacturing matters to the whole provincial economy - not just manufacturing workers.

The report indicated that the continuing high Canadian dollar poses a threat to the future of Canadian manufacturing, as well as trade imbalances with China and other offshore trading partners.  It urged government to invest more in skills and infrastructure, and make better use of domestic procurement opportunities to support Ontario manufacturers.

The Ontario Manufacturing Council is an arms-length advisory body composed of business, labour, and community stakeholders from the province's manufacturing industry.  Its vice-chairs are CAW Economist Jim Stanford and Jayson Myers from the Canadian Manufacturers and Exporters.  The full report is available from the CAW Research Department, or at http://on.cme-mec.ca/download.php?file=gi99oczy.pdf.

Economic Impact of a $1 billion Increase

in Manufacturing Sector Exports

 

GDP

($million)

Employment

Manufacturing

805

7,779

Spin-offs to Other Sectors:

1,099

8,776

  Agriculture

18

250

  Other Primary

9

47

  Utilities

34

118

  Construction

93

923

  Transportation & Warehousing

34

157

  Wholesale & Retail Trade

154

1,244

  Finance, Insurance, Real Estate

340

685

  Professional, Scientific, Management

142

1,011

  Accommodation & Food Services

25

454

  Education Services

59

1,113

  Health & Social Services

80

1,617

  Other Private Services

50

404

  Government Services

64

740

Total Economy

1,904

16,545

Source: Centre for Spatial Economics.

 

 

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