Canada lost nearly 322,000 manufacturing jobs from 2004 to 2008, with more than one in seven manufacturing jobs disappearing over the period. More than 1.5 million jobs were created in the rest of the economy during this period, according to a recent report from Statistics Canada.
The losses resulted in the erosion of the share of manufacturing jobs in the economy. In 2004, manufacturing represented 14.4 percent of total employment; in 2008, the proportion was 11.5 percent.
Almost all manufacturing industries have seen a sharp decline since 2004. Of the 23 studied, only six showed job growth from 2004 to 2008, including transportation equipment – excluding automobiles and automobile parts (9.2 percent), oil and coal products (8.5 percent), and computer and electronic products (7.4 percent).
Conversely, 17 industries had job losses, often in high proportions. Textiles and clothing, which has long been one of the largest manufacturing employers in the country, was the hardest hit among the manufacturing industries. From 2004 to 2008, clothing manufacturers and textile and textile product mills saw almost half of their jobs disappear.
The Canadian automotive industry was also hard hit. Automotive parts manufacturing lost more than one-quarter of its employees from 2004 to 2008, while motor vehicle manufacturing lost one-fifth.
Parts manufacturers saw their jobs go from 139,300 to 98,700, countering the strong growth from 1998 to 2004. Motor vehicle manufacturers lost 15,900 jobs between 2004 and 2008, following a rather modest job growth of 5.0 percent from 1998 to 2004.
All industries related to wood and paper are suffering. Wood product manufacturers lost 57,300 jobs from 2004 to 2008, which more than negated all of the growth experienced from 1998 to 2004 (37,900 jobs).
The entire lumber industry has experienced major challenges in these past few years, including the imposition of antidumping and countervailing duties by the U.S. from 2002 to 2006, the increase in energy and raw materials prices, the decrease in the demand for and price of lumber and the increase in the exchange rate of the Canadian dollar.
The paper manufacturing industry has been in a downturn for 10 years, employment having declined successively by 14.7 percent from 1998 to 2004 and by 12.7 percent from 2004 to 2008. Mirroring the slump in the paper industry, the printing industry lost 10.5 percent of its jobs from 2004 to 2008.
In six provinces, at least one in ten manufacturing jobs were lost from 2004 to 2008. The largest drop was in Ontario, where 198,600 jobs, almost one in five (18.1 percent), disappeared in only four years. Significant drops were seen in Newfoundland and Labrador, New Brunswick, Quebec, British Columbia and Nova Scotia.
Small towns and rural areas were as likely as very large cities to replace lost manufacturing jobs with jobs in other industries, for example, in the service sector or in construction. However, in small towns and rural areas, such jobs are often much lower paying than manufacturing jobs.
These trends are not unique to Canada – manufacturing has been declining in many countries. The situation in Canada was noticeable for being somewhat delayed, with manufacturing jobs beginning to decline only in 2004, while other countries had already registered significant job losses for several years.
The U.S., which continues to be Canada’s largest trading partner, lost close to one-quarter (4.1 million) of its manufacturing jobs between 1998 and 2008.
Examining industrial production, measured by gross domestic product (GDP), provides a different perspective than employment data. Industrial production was in a slump from 2004 to 2007, and dropped 3.7 percent in the first two quarters of 2008.
Each year, industrial production increased less than the total overall production. However, production generally decreased less than employment, meaning that some of the job losses can be attributed to increased productivity in manufacturing industries. In 3 out of 4 years from 2004 to 2007, and 7 out of 10 years from 1998 to 2007, labor productivity increased more quickly for manufacturing industries than for the economy as a whole.
While production was decreasing, businesses were becoming more efficient and could produce more with the same workforce.
The full report is available from Statistics Canada at www.statcan.gc.ca.
Source: Statistics Canada“