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Fewer Canadian firms are preoccupied with cost-saving and outsourcing production to nations like China and more are focused on growth, according to a new report from consulting firm KPMG.
“There is a trend back to onshoring with more work being done here because you’ve got better consistency of quality,” Don Matthews, KPMG’s diversified industrials national sector leader, said.
Higher transportation costs have also prompted companies to move their sourcing back to North America.
Matthews said southwestern Ontario with its proximity to the U.S. is in a good position to take advantage of the trend.
“We have come through a period of tough times, but the manufacturers participating in this survey see there are some bright things on the horizon and they see things getting better,” he said.
“It might not be dramatic, it might not be overnight, but things are turning around and there are positive things happening out there.”
The KPMG survey of Canadian manufacturers found that only 14% planned to source from China in 2014, down from 31% in 2013.
Similarly, only 3% planned to source from India in 2014, down from 12% in 2013.
China and India are noted in the report as two jurisdictions that companies are drawing away from to find products manufactured with greater quality and consistency— two characteristics Canadian manufacturing has a strong reputation for, the report said.
Global companies are also facing a shortage of skilled workers. Canada has the people, colleges, universities and trade institutions to train the right individuals for the right jobs, KPMG said.
“We’ve got lots of workers available. We may not have the right match between the workers and the skills but we can overcome that,” Matthews said.
Agencies/Canadajournal
