Productivity is measured as GDP produced per hour worked. The government says:
Between 1999 and 2008 labour productivity in the Manufacturing sector increased 0.2% per year on average. In comparison, labour productivity for the Canadian Economy increased 2.4% per year.
That growth rate spread is widening as the recession has hit the manufacturing sector so hard that it's productivity is experiencing negative growth.
Economic growth predictions have been scaled back across the OECD from the optimistic outlook of earlier in the year. Canada's dollar is now predicted to continue to rise significantly in the next year. This harsh confluence of circumstances will pinch Canada's manufacturing base like never before. The relative strength of the dollar will ensure job losses to the US and beyond.
Now is the time to invest in some of those powerful canuck bucks in world class new equipment, and make the paradigm shift to Lean. The manufacturing productivity gap is a national crisis, and needs to be treated as such.
Is making things a thing of the past? I say that making things is critical to our economic and physical security.
Many intelligent Canadians believe we are an economy of technical knowledge and services, and the flood of jobs offshore is just a natural consequence of how smart we are, and we in the west will naturally continue to retain our rightful place on top of the heap. (Check out my last post where Andy Grove, founder of Intel describes how this is a false hope.) If you take a look at world wide economic growth rates, emerging economies are outgrowing the west and will continue to do so. Productivity means competitiveness, and right now Canada is being left behind. We need to do something better with our manpower besides dig in the ground for non-renewable resources to sell.
The stimulus budget spending has got us this far. Now leadership needs to take a long view of Canadian competitiveness and aggressively pursue improved productivity in the manufacturing sector.
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