CIBC World Markets - Press Releases - 1 views
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Canadian companies facing stiff competition from better-capitalized, more efficient facilities stateside
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The economic recovery will add more manufacturing jobs in Canada relative to the U.S., but the gains may be shortlived amid stiffening competition south of the border
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the improvement in the U.S. is not only stronger, but also much more capital intensive - a trend that will hinder Canada's competitive position in the post recession economy
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"radical restructuring" of industry, Mr. Tal says, where "much more is being produced with less labour."
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In Canada, where overall industrial production has stabilized in recent quarters, manufacturing activity in capital intensive sectors has also outpaced activity in labour intensive sectors, though to a lesser degree than in the U.S
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Examples include Canada's chemical, electronics and computer manufacturing sectors that still utilize a much lower capital-to-labour ratio than in the U.S.
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The high labour intensity of Canadian manufacturing means that jobs growth here will be relatively stronger during the economic recovery to meet demand, even with a strong Canadian dollar. "However, given the increased prevalence of better-capitalized and more efficient production facilities stateside, Canadian manufacturers will find it even more difficult to compete when the dust settles."