"Losing five percent of the total manufacturing workforce in one month is a distressing record that underpins the severity of the crisis facing the industry," said CME president Jayson Myers, in reference to the 101,000 jobs shed by the manufacturing sector in January. "These staggering numbers reflect temporary layoffs as companies respond to the downturn in orders. Our job is to ensure that those temporary layoffs don't become permanent. This reinforces the need for governments to act quickly on providing credit to Canadian companies as well as developing a long-term strategy to backstop manufacturing."

And according to the CME, it could get worse. The data in the association's most recent monthly business conditions survey paints a bleak picture in the upcoming months. According to the association's January Business Conditions Survey, orders are expected to drop over the next three months, causing a further reduction in employment. Forty-three percent of firms surveyed said that orders are likely to decrease between January 2009 and April 2009, while 42 percent of companies said that employment levels are likely to fall over the next three months.

"We are seeing a very serious meltdown in customer demand that is ricocheting throughout business sectors connected to our major export market, the U.S.," Myers added. "Companies are finding it more difficult to access the financing they require to invest in new products and new technologies, grow their business and in some cases, simply stay in business.

"When you start off a new year with an all-time record in job losses in the first month, and data that supports a further economic decline, you wonder if 2009 will redefine financial 'rock bottom' for Canadian manufacturing," Myers said.