Canadians are well known to think of themselves as overly reliant on raw material extraction and export. They are also known to worry that manufacturing is in decline. Last week's panicky news included the closing of Caterpillar's London Ontario locomotive plant and the loss of about 450 jobs. While this is not good for Ontario, it is not indicative of the Canadian manufacturing sector.
(click the graph to enlarge it)
The graph above shows the ranking of all Canadian industries as classified by Statistics Canada. First, notice that agriculture, forestry and fishing are so small that they are combined into a single category.
Next, notice that this category ranks 15th out of 17 in size. Canada is clearly not overly dependent on primary industries.
Finally, notice that manufacturing is very strong, ranking 2nd out of 17 categories. This is a very cyclical sector, but the ranking will hold for nearly every year.
What about manufacturing jobs? This is just as important to people as the dollar value of the sector.
(click the graph to enlarge it)
This graph shows the number of manufacturing jobs in Canada each year since 1976. It also shows the national population. Notice that jobs in the sector definitely fluctuate, but the jobs trend is growing. Each peak is higher than the previous peak and each valley is higher than the previous valley. (2010 is the next low point, with jobs rising in 2011).
But, also take note of the growth rates. The average annual rate of manufacturing jobs growth is 0.48% while population growth is 2.2%. The fact that the population is higher than manufacturing jobs indicates that labour productivity is growing and that the general shift in the economy's structure continues.
The ongoing growth in total sector jobs shows that productivity does not destroy jobs.
The fluctuation in jobs shows that the road is neither easy nor guaranteed. But the positive trend line shows that Canada is fully able to maintain and add manufacturing jobs over the long term.
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