Survey: Nine of 10 Canadian manufacturers facing supply chain issues

A recent survey conducted by Canadian Manufacturers & Exporters (CME) revealed that nine of 10 manufacturers in Canada are facing supply chain disruptions. Over sixty percent of them said that the disruptions are major or severe.

The respondents also shared they lost around $10.5 billion in sales due to the supply chain disruptions. Additionally, they are now experiencing nearly $1 billion in increased costs.

According to a statement released by CME, these issues are hindering the recovery of Canada’ manufacturing sector.

“Our survey confirmed what we’ve been hearing from manufacturers on the ground for a long time. Demand for manufactured goods is strong but we are increasingly unable to keep up let alone take advantage of this boom. Labour shortages, supply chain challenges and higher input costs are big problems. If we don’t address these, Canada’s economy will suffer,” said Dennis Darby, president and CEO of CME.

CME conducted this survey between February 8 and February 28, intending to provide context to the major supply chain issues affecting manufacturers, how companies are trying to address them and potential solutions.

Other major highlights from the survey include:

• Eight out of 10 manufacturers facing supply chain challenges say they have been forced to increase prices and delay fulfilling customer orders
  
  
• Only 18 percent of manufacturers plan on sourcing more of their inputs to Canada in response to these disruptions and, when asked why, 44 percent cited the fact that there are no Canadian suppliers of their critical inputs 
  
  
• 28 percent of manufacturers said they are likely or very likely to relocate or scale-up production in Canada to mitigate supply chain bottlenecks, with the availability and cost of labour as the biggest hurdles to relocating or scaling-up production in Canada
  
  
• Most manufacturers predict that these disruptions will not end this year, but rather some time in 2023 or even as late as 2024

CME noted that while the disruptions are mostly global, signigficant Canadian government action is needed to address them.

Manufacturers feel the government needs to increase the inflow of temporary foreign workers and immigrants to ease labour shortages, provide financial supports to help scale-up domestic manufacturing and increase investments in transportation infrastructure.

“Manufacturers have been feeling supply chain pressures for months now as a result of the COVID-19 pandemic,” said Darby. “Omicron, the flooding in B.C., the trucker vaccine mandate, and border blockades have all added to the crisis.”

Darby also asked the government to:

• Address all transportation bottlenecks and avoid policies that will aggravate them further
  
  
• Speed up immigration into Canada to fill vacant jobs in manufacturing and other key sectors
  
  
• Provide more support to help manufacturers accelerate the adoption of automation technologies
  
  
• Increase investments in infrastructure that facilitates trade and industrial development
  
  
• Lead and support a comprehensive supply chain mapping of Canada’s domestic capacity of strategically important intermediate and final manufactured goods

“Bottom line, there are many things Canada must do to tackle the supply chain problem. But it all starts with a firm commitment from government to work with industry to resolve these challenges,” added Darby.