Manufacturers need to look beyond the U.S.

Strong dollar and emerging markets make over-reliance on one partner risky: study

Canada’s mid-sized manufacturers need to diversify their markets and embrace competitiveness on a global level to be successful, according to a recent study.

Accounting and consulting firm Grant Thornton LLP's study, Manufacturing Insights 2006, found the success of Canada’s economy, the strength of the dollar and the impact of low-cost markets makes it untenable for 98 per cent of the country’s mid-sized manufacturers to rely on the United States as their primary market.

"The road ahead is not without challenges for mid-sized manufacturers. The signs can't be ignored. Continued reliance on one market is not sustainable and poses significant and obvious risk," said Jim Copeland, leader of the Grant Thornton manufacturing and distribution division for Canada.

In the past year China has closed the gap and at times surpassed Canada as the United States’ largest trading partner.

While Canadian manufacturers reported relatively low trade with China, U.S. respondents are looking to increase trade with China.

Canada's mid-sized manufacturers contribute to a sector that represents 21 per cent of the nation's GDP. That percentage increases to 55 per cent when spin-off goods and services are included — infusing roughly $200 billion into the Canadian economy.

To read the full story, login below.

Not a subscriber?

Start your subscription today!