Supply chain and labour shortages delay manufacturing recovery: report

A Canadian Manufacturers and Exporters (CME) report shows the sector is contributing to Canada’s post-pandemic economic recovery but its efforts are limited by the ongoing supply disruptions and labour and skills shortages.

While manufacturing activity has been on the upswing, the sector’s recovery has been more drawn out than expected, attributable to ongoing supply chain disruptions and labour and skills shortages.

“By most measures, Canada’s recovery from the pandemic has been impressive, but now is not the time to be complacent,” said Dennis Darby, President and CEO, CME. “If we do not address the country’s long-term challenges, the economy will soon return to its previous slow growth path. Clearly, there has never been a better time for governments to partner with industry to build a more vibrant and resilient Canadian manufacturing sector.”

Along with the lingering impact of the pandemic, Russia’s invasion of Ukraine will prolong supply chain disruptions and keep inflation elevated for longer than previously expected, weighing on the manufacturing sector’s near-term growth. After reaching 4.5 per cent in 2021, real manufacturing output growth is forecast to slow to 3.5 per cent in 2022 and to 3.2 per cent in 2023.