Canadian food manufacturing industry slow to recover from recession says report

Wednesday, March 26, 2014

by SUSAN MANN

Recent analysis from the George Morris Centre indicates that the recovery pace of Canada’s food manufacturing industry is much slower than the country’s manufacturing sector as a whole.

During the five years after the recession, from 2009 to 2013, the sales of the overall manufacturing sector grew by a compound annual rate of five per cent compared to just two per cent for food manufacturing, says the analysis, issued by Kevin Grier, the Guelph agriculture and agri-food think tank’s senior market analyst.

The analysis builds on data presented in a recent study by the Western University Ivey School of Business processed food research program and the Canadian Agri-Food Policy Institute. Researchers involved in the Ivey study reported on nine findings that outlined the sector’s state, including changing employment structure, investment, sales growth and profit.

The Ivey report examined the performance of the food manufacturing industry from 2004 to 2011, and Grier asserts in his analysis that the situation has changed in the two years since.

The data from 2011 to 2013 on food manufacturing sales, profits and employment show the situation “has eroded,” he writes. The industry has lost ground either nominally or relatively in all three areas since before 2011.

In a telephone interview, Grier says the main reason he did his analysis was that based on the Ivey report it looked like everything was kind of “rosy” for food manufacturers “but based on my data it didn’t look too rosy to me so I just pointed out some of the things that have changed since 2011 when the Ivey data ended.”

Grier says relatively speaking overall manufacturing has “grown faster during the recovery” than food manufacturing and people might even expect that result. “Food is known as a fairly stable industry.” The fact that it didn’t crash and burn during the recession “shouldn’t have been a big surprise.”

Compared to furniture and televisions, food is not a discretionary item. But when the recovery happened one would expect that discretionary item manufacturers might start to grow faster again, he says.

“The other side is the food industry has been under pressure” and has faced challenges to its growth from United States imports, appreciation of the Canadian dollar and slower exports, he explains. BF