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The Curious Case of Canada’s Ailing Manufacturing Industry

After enjoying two years of modest recovery, Canada’s manufacturing sector took a significant step backward in 2013, shedding around $3 billion in real output and 50,000 net jobs. This marked one of the notable disappointments on the Canadian economic landscape and dealt a blow to hopes that the sector was poised to snap out of its longer-term decline. While ongoing concerns surrounding the sector’s competitiveness remain, we do see scope for a moderate bounce back in activity over the 2014-15 period. The two-pronged boost associated with firming U.S. demand and a falling Canadian dollar should propel the sector back into expansion mode. And, some of the recent forward-looking indicators – while hardly robust – are consistent with an upturn in factory activity.

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Publisher: TD Economics

Jurisdiction: National

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