Trends in the Manufacturing Industry In The US and Canada after The Covid-19 Pandemic

By Jonathan Itamah

Three years ago, the onset of the Covid-19 pandemic was an unprecedented occurrence that no one saw coming. Lockdowns by the governments of Canada and America and, indeed, globally effectively prevented the contagious spread of the disease. Those in the manufacturing industry were obviously not spared. The CEO of our firm’s sister runs a large manufacturing business in southwestern Ontario, so we understand the situation intimately.

The pandemic hit many industries hard, forcing them to lay off workers and reduce working hours, among other mitigation measures that were recommended by the health ministries at the time.

These, of course, were detrimental to the manufacturing sector as it employs many and includes a well-laid-out supply chain which was significantly disrupted. As all focus was on masks, health equipment, and materials, it reached a near standstill.

Manufacturing ranges from the textile industry, food production, electronics, automotive, chemicals and plastics, metal and construction materials, to name a few, to almost anything you can think of. The end result was a drastic shift in demand, as consumers needed to get basic necessities to live day by day. We can’t avoid mentioning the toilet paper demand.

According to a survey carried out by the Canadian Manufacturers and Exporters(CME), 65% of the respondents reported the inability to increase their production, which resulted in a significant decline in their level of domestic and foreign output at the time. This is no small decrease.

With the pandemic mostly behind us and the world returning to normalcy, the manufacturing sector in both countries (US and Canada) is making considerable strides to return to it’s thriving pre-pandemic period. So, what new changes are being witnessed in the sector?

The resurgence of the labour force

Manufacturing jobs in the US and Canada have been on a steady rise and have recorded a slight increase, surpassing the pre-pandemic period numbers. For instance, the Department of Labor in the US reported that manufacturing companies in the country added 29,000 jobs in June 2022, while general employment increased by 372,000 jobs.

Notably, the perishable products manufacturing sector increased more workers than its durable products manufacturing counterpart. The perishable products industry accounted for 18,000 additional workers to it’s existing pool of 4.8 million workers, while the durable products manufacturing sector increased by 11,000 more employees in addition to their existing workforce of 7.9 million people.

Generally, the US manufacturing industry currently employs over 12,797,000 people, at least 2,000 more people than in the pre-pandemic period. In Canada, there’s a cause for optimism in hiring in the sector. Though the world is slowly opening up, the industry has recorded 91.9% employment levels from February 2022.

Shift in Demand

As earlier stated, the pandemic caused untold grief as many businesses were unable to sustain their production capacity due to movement restrictions making it difficult to source product inputs.

Moreover, there was a shift in demand for consumer products which resulted to unpredictable buyer behaviour thus, economic contraction.

However, the lifting of most of the mitigation measures by the two countries has had a ripple effect on consumer behaviour. There has been a steady increase in sales levels, which can be attributed to factors such as increased disposable income and availability of inputs to sustain demand.

For instance, the value of sales increased by 27.8% between January 2020 and June 2022 while the volume of the sold goods increased by 0.1%.

Arguably, the exhibited trends are good for a short time recovery period, and it is difficult to predict what the long-term recovery period situation will be like.

What can you do to prevent a fallback?

If you are engrossed in the manufacturing industry, it’s only natural to be concerned about the future of the industry and your position in it. And with the effects of the pandemic which are still fresh in our minds, it’s only fair to want some assurance, protection and ground that you can stand on in case things fall back. Here are some of the things you can do to keep yourself steady;

Have a steady financial advisor

Having a financial advisor and or consultant to guide you throughout your financial journey is an undulated blessing. Whether you are using a financial institution or just consultancy services, they will go a long way to helping you navigate the unforeseen circumstances in the market and equip you on how to handle them and manage various risks.

Szymon Zephan Capital group (SZC) for instance, can be a perfect fit for the role as we have a team of experts who are committed to helping you in every step of your business journey. We arrange to finance entities that require custom finance solutions. Beyond specializing in debt financing arrangements and providing asset-based solutions to borrowers in transition, we can offer you many tailored solutions

Diversifying your portfolio

One great lesson that the pandemic has taught most businesses is the need to become flexible by diversifying their portfolio, which is not limited to the manufacturing industry. This can mainly be achieved through having a pool of suppliers, which can reduce the pressure on the global supply chain system.

A flexible supply chain network can also help manage inventory, a crucial aspect of business success.

Further, a robust supply chain system will prevent the chain’s collapse in case of any economic shocks. This can ensure a steady flow of inputs and outputs, thus, sustainable revenues.