Food manufacturing in Canada continued to grow despite recession

Canada's food manufacturing industry outperformed its peers in the manufacturing sector during the recession, with profits, production and employment all rising last year. The industry will continue to expand this year and beyond, albeit at a modest pace, according to the Conference Board's Canadian Industrial Outlook: Canada's Food Manufacturing Industry-Summer 2010, released on September 15.

"The Canadian food manufacturing industry is often taken for granted," said Michael Burt, associate director, Industrial Economic Trends. "The industry is one of the few components of Canada's manufacturing sector that has recorded consistent growth in recent years. As a result, it is now the largest source of manufacturing employment in Canada, a total of 240,000, which is 14 percent of the jobs in the sector."

Sales growth in the industry slowed during the recession as consumers tightened their budgets – but it did not turn negative, since people need to eat. Because sales did not undergo a major correction, they will not experience a large post-recession rebound. Domestic demand is expected to rise modestly, and the industry has increasing opportunities for above-average growth in export markets. The industry will also have to be responsive to changes in consumer tastes and preferences.

A 3 percent increase in revenues, combined with lower energy and commodities costs, helped industry profits increase by 30 percent to almost $4.2 billion in 2009. Agricultural product costs and energy prices are expected to increase in line with revenue growth this year, so profit levels are forecast to grow by just 1.5 percent in 2010. Modest profit growth is expected through the end of the forecast period (2010 to 2014).