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Manufacturing optimism dips
Toronto—Canadian manufacturers are shaking off the false sense of security they were lulled into during the late 1990s, according to a
new report, Manufacturing Insights 2007: a Canadian Perspective, by Grant Thornton LLP, an accounting and consulting firm.
According to the report, the low Canadian dollar and robust demand from the US a decade ago caused manufacturers to underplay the
effects of global competition. To compensate, they must take aggressive action.
“Manufacturers are feeling the pinch with increasing revenues and reduced profitability...,” said Jim Copeland, national leader with
Grant Thornton. “Resolving this kind of crunch will require a shift in our current focus from what we have now to more advanced and
leaner business practices, including the possibility of outsourcing key operations and processes or using supply chain management in innovative new ways to generate efficiencies and improve profitability.”
Grant Thornton’s research shows a decline in optimism among manufacturers, after a peak in 2005. Now, they’re taking full account of higher cost of commodities, wages, energy and transportation. While companies weren’t naive about their prospects
in the late 1990s, they were too focused on the US market, according to the report’s authors.
Moving ahead, they must design more nimble supply chains, and tap into lowercost global markets—beyond China—to regain their competitive advantage. b2b
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