Labour Shortages Constraining Manufacturers’ Recovery

Labour shortages, supply chain disruptions, and higher input costs ranked as the top challenges manufacturers continue to face, says the national business outlook from the Canadian Manufacturers & Exporters (CME). These problems are hampering the sector's recovery despite strong demand for goods and an optimistic outlook by those in the business. “Our survey confirmed what we've been hearing from manufacturers on the ground for a long time. Demand for manufactured goods is strong, but we are increasingly unable to keep up let alone take advantage of this boom,” says Dennis Darby, president and CEO of CME. He adds that if these issues aren’t addressed, “Canada's economy will suffer.” The outlook says the 77 per cent of manufacturers’ biggest challenge is attracting and retaining a quality workforce. More than 80 per cent face labour and skills shortages, up significantly from 60 per cent in 2020. Labour shortages are most acute in Quebec, Atlantic Canada, and British Columbia. Labour and skills shortages are so severe today that almost one in five manufacturers are considering moving some or all their production outside Canada. At the same time, over the next year, 75 per cent of respondents say they expect sales to increase. Eighty-eight per cent say their suppliers' delivery times are slower compared with the situation one year ago. CME says the gravity of the labour and skills shortages requires significant government action. Manufacturers feel the government must do more to promote the skilled trades and manufacturing careers and provide more financial support for investment in automation but, most of all, increase the intake of economic class immigrants.