Canadian manufacturers shipped goods worth $49.8 billion, down 0.3% from July. However, if price declines were taken into account, the overall volume of shipments actually increased 0.5% to $45.0 billion.

Constant dollar shipments (taking price fluctuations into account) in August 2006 were 2.3% lower than they were in August last year, and declined 0.4% when comparing the first eight months of 2006 to the same period in 2005.

Shipments decreased in 12 of 21 manufacturing industries in August. Durable goods shipments fell by 1.0% to $26.4 billion, with the transportation sector declining for a second month. Non-durable goods increased by 0.6% to $23.4 billion, thanks to increases in paper, chemicals and food manufacturing. These increases were tempered some by lower shipments from the petroleum industry.

Shipments fall on lower transportation output and petroleum prices

Shipments of transportation equipment fell 1.5% to $9.2 billion. This was the second month of decline as the automotive post-shutdown season started more slowly than usual. Automotive manufacturing shipments fell 1.5% to $4.9 billion as a result of slower vehicle sales. Auto parts shipments were down 1.2% to $2.3 billion.

Falling prices for petroleum and coal products resulted in a decline in shipment value of 2.0% to $5.6 billion, dropping the industry to number three, behind the food industry.

Food manufacturing increased 1.2% to $5.7 billion, making it the second largest industrial sector after transportation, thanks in part to increased production of seafood on the East Coast and beef on the prairies.

Chemicals increased 1.8% to $4.5 billion — the second highest level on record and the highest in 10 months. Shipments of paper products jumped 4.4% to $2.7 billion, the highest level in 2006.

Shipments up in six provinces

Shipments by province showed no strong regional trends with Ontario posting only marginal gains while Quebec shipment levels declined slightly.

In the Atlantic provinces, Newfoundland and Labrador and Prince Edward Island experienced strong increases in shipments, especially in the food industry, while Nova Scotia's shipments increased only slightly. New Brunswick's sharp decline was influenced by lower petroleum prices.

The picture in the West was also varied. Manitoba and Saskatchewan experienced declines while Alberta saw a marginal increase in shipments. British Columbia, on the other hand, saw strong growth on paper products.

Shipments from Quebec declined 1.6% to $11.8 billion, with the largest decrease coming from the primary metals industry followed by petroleum, which fell by 3.0% due to lower prices and volume.

The transportation industry, which accounts for nearly a third of all of Ontario's manufacturing output, decreased 2.0% to $7.6 billion. Automotive manufacturing posted a 1.5% decline to $4.8 billion. Decreases in the transportation and machinery industries largely offset gains in the petroleum (+6.0%), fabricated metals (+4.2%) and primary metals (+3.3%) industries between July and August.

Manitoba's 4.2% decrease in shipments to $1.2 billion was largely due to a decline in the value of shipments in the primary metals industry and also a $7.5 million decline in the value of food shipments. Transportation equipment manufacturing rose by 8.2%, offsetting some of the decline.

Chemical manufacturing posted the strongest gains in Alberta, contributing to a 0.2% increase to $5.7 billion. In spite of weakening oil prices, shipments of petroleum and coal products were the second strongest in Alberta after chemicals.

Shipments from British Columbia increased 4.8% to $3.6 billion largely due to a 17.8% increase in paper shipments to just over a half billion dollars and primary metals, which increased by nearly one-fifth to just under $300 million. Wood product shipments decreased 1.4% to $722 million. Factors such as the protracted softwood lumber dispute, the high exchange rate, the high price of fuel and the decline in housing starts in the United States have meant a 15.8% drop in year-to-date shipments when compared to 2005.

Manufacturing shipments, provinces and territories
	July 2006r	August 2006p	July to August 2006
	Seasonally adjusted
	$ millions		% change
Canada	49,973	49,842	-0.3
Newfoundland and Labrador	160	181	13.0
Prince Edward Island	111	116	4.1
Nova Scotia	784	788	0.5
New Brunswick	1,422	1,286	-9.6
Quebec	12,014	11,823	-1.6
Ontario	24,233	24,300	0.3
Manitoba	1,300	1,245	-4.2
Saskatchewan	895	873	-2.5
Alberta	5,644	5,656	0.2
British Columbia	3,402	3,567	4.8
Yukon	2	2	5.7
Northwest Territories including Nunavut	7	6	-15.6
r revised p preliminary

Inventories increase in chemicals and wood products

Manufacturers' total inventories increased by $107 million dollars (+0.2%) to $63.1 billion in August, following a 1.3% rise in July — mainly because of a 2.0% increase in chemical inventories to $7.2 billion and a 1.4% increase to $4.7 billion in wood products.

Transportation inventories declined 1.5% to $8.6 billion, largely as a result of an 8.7% decline in motor vehicle manufacturing and a 1.9% decrease in aerospace products. Inventories of primary metals declined 1.0% to $6.6 billion. Inventory in raw materials and finished products increased while goods in process inventories declined in August.

Transportation leads decline in new orders

New orders declined by 1.1% to $49.5 billion in August.

After quadrupling between April and June of 2006, new orders fell significantly in the aerospace industry for the second straight month, declining by 11.4% to $1.2 billion. In the motor vehicle industry, new orders fell by over a quarter of a billion dollars to $4.7 billion. In total, new orders in the transportation industry declined by $312 million to $9.1 billion. Primary metals experienced the second largest decline (-3.1%) to $4.3 billion while machinery declined by 2.9% to $2.6 billion.

Transportation and primary metals behind drop in unfilled orders

Unfilled orders declined 0.8% to $41.1 billion following two months of small increases (+0.2% for July and +0.4% for June). The transportation industry experienced the largest decrease, falling 0.7% to $20.4 billion. While the aerospace industry rose slightly unfilled orders for motor vehicles drove most of the decline, slipping 15.4% to $1.3 billion.

The primary metals industry was another major contributor to the decline in unfilled orders, falling 4.9% to $2.0 billion in August.

Inventory-to-shipment ratio steady

The inventory-to-shipment ratio increased to 1.27 in August and the finished-product inventory-to-shipment ratio increased to 0.44 from 0.43, while the trend remained stable. The inventory-to-shipment ratio is a key measure of the time, in months, that would be required to exhaust inventories if shipments were to remain at their current level.

Manufacturing employment continues to recede

According to the Labour Force Survey for the month of August, goods-producing industries have continued to be affected by waning foreign demand. Manufacturing employment declined by 11,300 in August, bringing losses to 87,000 since the beginning of 2006.

Manufacturing has been shedding workers since 2002, with August marking the lowest level of employment for this industry since March 1998. Since the start of 2006, manufacturing declines have been widespread, with the largest decreases in food and motor vehicle and parts manufacturing.

Shipments, inventories and orders in all manufacturing industries
	Shipments		Inventories		Unfilled orders		New orders		Inventories-to-shipment ratio
	Seasonally adjusted
	$ millions	% change	$ millions	% change	$ millions	% change	$ millions	% change
August 2005	49,778	2.8	62,170	-0.4	41,260	2.1	50,637	3.3	1.25
September 2005	49,767	-0.0	61,840	-0.5	41,113	-0.4	49,620	-2.0	1.24
October 2005	50,350	1.2	62,118	0.4	41,646	1.3	50,883	2.5	1.23
November 2005	49,319	-2.0	62,289	0.3	42,083	1.0	49,755	-2.2	1.26
December 2005	50,098	1.6	62,051	-0.4	41,753	-0.8	49,769	0.0	1.24
January 2006	49,668	-0.9	62,066	0.0	42,179	1.0	50,094	0.7	1.25
February 2006	48,479	-2.4	62,216	0.2	42,183	0.0	48,483	-3.2	1.28
March 2006	49,469	2.0	62,292	0.1	42,308	0.3	49,594	2.3	1.26
April 2006	48,827	-1.3	62,003	-0.5	41,386	-2.2	47,905	-3.4	1.27
May 2006	48,505	-0.7	62,495	0.8	41,154	-0.6	48,273	0.8	1.29
June 2006	49,512	2.1	62,192	-0.5	41,326	0.4	49,683	2.9	1.26
July 2006	49,973	0.9	62,993	1.3	41,425	0.2	50,073	0.8	1.26
August 2006	49,842	-0.3	63,100	0.2	41,086	-0.8	49,503	-1.1	1.27

Manufacturing industries except motor vehicle, parts and accessories
	Shipments		Inventories		Unfilled orders		New orders
	Seasonally adjusted
	$ millions	% change	$ millions	% change	$ millions	% change	$ millions	% change
August 2005	41,363	1.7	59,080	-0.3	39,073	2.3	42,232	2.8
September 2005	41,841	1.2	58,704	-0.6	38,956	-0.3	41,724	-1.2
October 2005	41,980	0.3	59,113	0.7	39,530	1.5	42,555	2.0
November 2005	41,351	-1.5	59,298	0.3	39,906	1.0	41,728	-1.9
December 2005	42,067	1.7	59,060	-0.4	39,447	-1.2	41,607	-0.3
January 2006	42,034	-0.1	59,053	-0.0	39,771	0.8	42,358	1.8
February 2006	40,787	-3.0	59,329	0.5	39,652	-0.3	40,669	-4.0
March 2006	42,086	3.2	59,496	0.3	39,552	-0.3	41,985	3.2
April 2006	41,432	-1.6	59,275	-0.4	38,668	-2.2	40,548	-3.4
May 2006	41,330	-0.2	59,782	0.9	38,422	-0.6	41,084	1.3
June 2006	42,165	2.0	59,545	-0.4	38,745	0.8	42,488	3.4
July 2006	42,606	1.0	60,092	0.9	38,915	0.4	42,777	0.7
August 2006	42,579	-0.1	60,325	0.4	38,840	-0.2	42,503	-0.6

Note to readers

Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.

Durable goods industries include wood products, non-metallic mineral products, primary metals, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.

Unfilled orders are a stock of orders that will contribute to future shipments assuming that the orders are not cancelled.

New orders are those received whether shipped in the current month or not. They are measured as the sum of shipments for the current month plus the change in unfilled orders. Some people interpret new orders as orders that will lead to future demand. This is inappropriate since the "new orders" variable includes orders that have already been shipped. Readers should note that the month-to-month change in new orders may be volatile. This will happen particularly if the previous month's change in unfilled orders is closely related to the current month's change.

Not all orders will be translated into Canadian factory shipments because portions of large contracts can be subcontracted out to manufacturers in other countries. Also, some orders may be cancelled.

Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were down 0.5% in August, following a 1.8% rise in July. Lower prices for primary metal products and petroleum products were the major contributors to this monthly decrease.

The 12-month change in the IPPI was up 3.6%, down from July's year-over-year increase of 4.5%. Upward pressure came mainly from higher prices for primary metal products and petroleum products.

The Raw Materials Price Index (RMPI) was down 3.5% from July to August, following a 5.2% increase in July. The decrease was due primarily to lower prices for crude oil and non-ferrous metals.

Compared to August of last year, raw materials cost factories 9.7% more, down significantly from the year-over-year change of 19.0% in July.

In August, the IPPI stood at 115.2 (1997=100) down from a revised level of 115.8 in July. The RMPI reached 168.8 (1997=100), down from a revised level of 175.0 in July.

IPPI: Lower prices for primary metals and petroleum products

On a month-over-month basis, manufacturers' prices were down 0.5%, mainly due to lower prices for primary metal products and petroleum products.

Prices for primary metal products fell 1.6% compared to July, a sharp contrast to the 7.4% increase the previous month. Prices for copper and copper alloy products were down by 6.2%. Lower prices were also observed for aluminum products (-4.0%), refined zinc products (-8.4%) as well as refined gold products (-3.0%).

Petroleum and coal products prices decreased by 1.2%, a significant drop from the 5.4% increase in July. If petroleum and coal product prices had been excluded, the IPPI would have decreased 0.4% rather than 0.5%.

Motor vehicles and other transport equipment were down 0.7%, mainly due to the stronger Canadian dollar. Meat, fish and dairy products decreased 1.2% as prices for fresh or frozen pork and beef declined.

Prices for lumber and other wood products, fruit, vegetable and feed products as well as electrical and communication products also decreased in August.

IPPI: Primary metal and petroleum products continue to be the major contributors to the 12-month change

The IPPI was up 3.6% in August compared with the same month a year earlier, a decrease from the year-over-year change of 4.5% in July.

Prices for primary metal products were up 26.8% compared to a year ago. Prices for copper products (+78.4%), nickel products (+62.4%), refined zinc products (+132.5%) and aluminum products (+13.6%) were all higher compared with one year earlier.

Prices for petroleum and coal products rose 12.4% from August 2005, down significantly from the year-over-year increases observed in the previous four months. If petroleum and coal product prices had been excluded, the IPPI would have increased 2.8%, rather than 3.6% from a year ago.

Prices were also higher than one year ago for chemical products, pulp and paper products, metal fabricated products, rubber, leather and plastic fabricated products, non-metallic mineral products and tobacco products.

However, motor vehicles and other transport equipment prices were down 4.9% from a year ago, due to the continuing effect of a stronger Canadian dollar.

Lumber and other wood products declined 2.2% compared to August 2005, as year-over-year decreases were recorded for softwood lumber (-4.1%), particleboard (-6.8%) and pulpwood chips (-2.9%).

RMPI: Crude oil and non-ferrous metals push down raw materials prices

Raw materials prices fell 3.5% in August following an increase of 5.2% in July. Mineral fuels and non-ferrous metals were the major contributors to this monthly drop.

Mineral fuels decreased 5.2% compared to July. Prices for crude oil were down 5.9%, mainly due to higher inventories. If mineral fuels had been excluded, the RMPI would have decreased 1.7% instead of 3.5%.

Non-ferrous metals prices were down 3.7%, a substantial change from the 12.8% increase recorded in July. Weaker demand and increased stocks pushed down prices for zinc concentrates (-7.9%), copper concentrates (-7.8%) and gold (-3.0%).

Prices for vegetable products declined 4.0% from the previous month, mainly due to a strong supply of canola as well as better crop conditions and the harvesting of wheat crop.

Lower prices for animal and animal products as well as ferrous materials also contributed to the monthly decrease.

On the other hand, prices for wood products increased 3.0% from July to August while prices for non-metallic minerals remained unchanged.

On a 12-month basis, the price of raw materials rose 9.7% in August, down significantly from the 19.0% year-over-year increase in July.

Prices for non-ferrous metals rose 67.9%, mainly because of higher prices for zinc, copper, radio-active concentrates, nickel, gold, lead and silver.

Mineral fuels were up 1.7% with crude oil prices rising 2.3%. If mineral fuels had been excluded, the RMPI would have increased 20.1% instead of rising 9.7%.

Prices for wood products, vegetable products, animal and animal products, ferrous materials and non-metallic minerals were also up from a year ago.

Impact of the exchange rate

The value of the Canadian dollar against the US dollar was up 1.0% between July and August. As a result, the total IPPI excluding the effect of the exchange would have fallen 0.2% instead of its actual decrease of 0.5%.

On a 12-month basis, the value of the Canadian dollar rose 7.7% against the US dollar. If the impact of the exchange rate had been excluded, producer prices would have risen 5.6% between August 2005 and August 2006, rather than their actual increase of 3.6%.

Lower prices for intermediate goods

Prices for intermediate goods decreased 0.3% from July. Lower prices for primary metal products, lumber products, meat, fish and dairy products, fruit, vegetable and feed products, motor vehicles as well as petroleum products were the major contributors to this monthly drop.

Producers of intermediate goods received 6.6% more for their goods this August than in August 2005. Higher prices were registered for primary metal products, petroleum products, chemical products, pulp and paper products, rubber, leather and plastic fabricated products, metal fabricated products, non-metallic mineral products, and electrical and communication products.

These increases were partly offset by lower prices for lumber products, motor vehicles, meat, fish and dairy products, fruit, vegetable and feed products and tobacco products.

Finished goods prices decrease

Prices for finished goods were down 0.7% from July. Lower prices for petroleum products, motor vehicles, meat, fish and dairy products, fruit, vegetable and feed products, electrical and communication products and pulp and paper products were the major contributors to the monthly decrease.

Compared with August 2005, prices for finished goods declined by 0.7%. Lower prices were registered for motor vehicles, electrical and communication products, machinery and equipment and pulp and paper products.

These decreases were partly offset by higher prices for petroleum products, fruit, vegetable and feed products, tobacco products, furniture and fixtures, chemical products, rubber, leather and plastic fabricated products as well as meat, fish and dairy products.

Industrial product price indexes
(1997=100)
	Relative importance	August 2005	July 2006r	August 2006p	August 2005 to August 2006	July to August 2006
					% change
Industrial Product Price Index (IPPI)	100.00	111.2	115.8	115.2	3.6	-0.5
IPPI excluding petroleum and coal products	94.32	105.4	108.7	108.3	2.8	-0.4
Aggregation by commodities
Meat, fish and dairy products	5.78	107.3	108.6	107.3	0.0	-1.2
Fruit, vegetables, feeds and other food products	5.99	103.0	104.4	103.7	0.7	-0.7
Beverages	1.57	121.6	122.2	122.2	0.5	0.0
Tobacco and tobacco products	0.63	178.1	187.9	187.9	5.5	0.0
Rubber, leather and plastic fabricated products	3.30	113.8	118.3	118.8	4.4	0.4
Textile products	1.58	100.4	99.9	99.9	-0.5	0.0
Knitted products and clothing	1.51	104.3	104.9	104.9	0.6	0.0
Lumber and other wood products	6.30	88.0	87.0	86.1	-2.2	-1.0
Furniture and fixtures	1.59	115.6	118.1	118.1	2.2	0.0
Pulp and paper products	7.23	102.8	105.5	105.7	2.8	0.2
Printing and publishing	1.70	115.3	115.3	115.1	-0.2	-0.2
Primary metal products	7.80	113.4	146.2	143.8	26.8	-1.6
Metal fabricated products	4.11	120.7	123.9	124.0	2.7	0.1
Machinery and equipment	5.48	107.6	107.2	107.0	-0.6	-0.2
Motor vehicles and other transport equipment	22.16	96.1	92.0	91.4	-4.9	-0.7
Electrical and communications products	5.77	93.5	94.0	93.8	0.3	-0.2
Non-metallic mineral products	1.98	114.9	120.0	120.0	4.4	0.0
Petroleum and coal products1	5.68	217.1	247.1	244.1	12.4	-1.2
Chemicals and chemical products	7.07	118.8	122.0	122.5	3.1	0.4
Miscellaneous manufactured products	2.40	110.0	113.6	113.4	3.1	-0.2
Miscellaneous non-manufactured products	0.38	169.2	238.4	243.5	43.9	2.1
Intermediate goods2	60.14	112.2	120.0	119.6	6.6	-0.3
First-stage intermediate goods3	7.71	121.4	147.4	145.8	20.1	-1.1
Second-stage intermediate goods4	52.43	110.8	115.9	115.6	4.3	-0.3
Finished goods5	39.86	109.6	109.6	108.8	-0.7	-0.7
Finished foods and feeds	8.50	112.1	113.9	113.4	1.2	-0.4
Capital equipment	11.73	102.4	100.0	99.6	-2.7	-0.4
All other finished goods	19.63	112.9	113.4	112.3	-0.5	-1.0
r revised p preliminary 1. This index is estimated for the current month. 2. Intermediate goods are goods used principally to produce other goods. 3. First-stage intermediate goods are items used most frequently to produce other intermediate goods. 4. Second-stage intermediate goods are items most commonly used to produce final goods. 5. Finished goods are goods most commonly used for immediate consumption or for capital investment.

Note to readers

The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.

Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp, paper, and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI.

The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada.

ST. PAUL, Minn.--HighJump Software, a 3M company, announced September 20 that it has entered into a definitive agreement to acquire Global Beverage Group Inc. (GBG) of Waterloo, Ontario, a provider of delivery management solutions for the direct-store-delivery of consumer packaged goods. Terms of the transaction were not disclosed.

More than 500 consumer packaged goods companies rely on GBG's solutions to manage shelf space and branded products. Focusing on the last mile of delivery, its software helps route drivers improve merchandising, delivery and reconciliation of routes, which can lead to increased sales effectiveness and customer service. These solutions provide capabilities for specific markets, including soft drinks, beer, baked goods, wine and spirits, and snack foods.

"HighJump Software helps customers streamline supply chain operations from the original source of materials through final delivery to the end customer," said Joe Blauert, chief operating officer, HighJump Software. "We are extremely impressed with the level of control and visibility GBG provides at the point-of-consumption - an area of the supply chain that is often overlooked."

"Our vision of helping customers solve real supply chain challenges with intuitive solutions is very much in line with HighJump Software's approach," said Ted Hastings, CEO, GBG. "We look forward to our software becoming a key element of the suite of supply chain execution solutions that HighJump Software and 3M can bring to customers."

Complementary acquisitions such as this support both 3M and HighJump Software's core business and growth strategy to expand into adjacent markets. HighJump Software continues to strengthen its ability to deliver supply chain execution solutions to meet the increasing demands of global supply chains.

The transaction is expected to close November 2006, subject to customary closing conditions. Seven Hills Partners served as GBG's investment bank for this transaction.

About GBG

GBG is a leading provider of software for the direct-store-delivery of consumer packaged goods. GBG's solutions are used by more than 570 organizations that distribute soft drink, beer, baked goods, wine and spirits, snack foods, as well as candy and tobacco. GBG has offices in Canada and the United States. GBG was founded in 2000 in Waterloo, Ontario, part of Canada's technology triangle.

About HighJump Software, a 3M Company

HighJump Software, a 3M company, is a global leader in providing highly adaptable, best-of-breed supply chain execution solutions that streamline manufacturing and distribution from the point of source through consumption. HighJump Software's integrated solutions empower operational excellence in the warehouse and optimize the flow of inventory throughout the supply chain by facilitating collaboration with customers, suppliers and trading partners. These solutions combine robust, standard functionality; a best practices-based implementation methodology; and a uniquely adaptable architecture that facilitates fast, cost-effective system modifications. As an independent subsidiary in the 3M family of companies, HighJump Software leads the supply chain execution software industry in financial strength and delivers on an unmatched commitment to innovation and quality.

About 3M - A Global, Diversified Technology Company

Every day, 3M people find new ways to make amazing things happen. Wherever they are, whatever they do, the company's customers know they can rely on 3M to help make their lives better. 3M's brands include Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers in more than 200 countries around the world, the people of 3M use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications; safety, security and protection services; health care; industrial and transportation. For more information, including the latest product and technology news, visit www.3M.com.

Seventy-nine percent of the 534 Canadian business leaders who participated in this year’s survey are expecting their business to improve over the next 12 months. The main reasons cited for their optimism include an increase in sales (61%), entry into new markets (42%), development of new products (33%) and the buoyant economy (32%). However, there are signs of regional differences with more companies in Western Canada (particularly Alberta) expecting business to improve a lot.

“Companies that are improving as a result of the buoyant economy, like the 60% of Alberta respondents, should review their strategy and consider ways to ensure that it is sustainable,” says Eric Andrew, PwC’s Private Company Services Canadian leader. “While forecasts are up, respondents acknowledged a number of issues and challenges that influence their company. For the second year running, labour shortages top the list of challenges (38%), followed by competition/discounting (35%) and profitability/margins (30%). All of these pose a significant risk to future results and beg forward-thinking strategies to neutralize or, perhaps more realistically, minimize the threats.”

While acknowledging these challenges on the horizon, companies are not aligning their priorities or reviewing their processes to address them. Fifty-seven percent of respondents say their growth will come from new products or markets, but less than a quarter are prioritizing product development. Most say that labour shortages are an issue but less than one in five is looking to improve their human resources function. Even in Alberta, where 74% of companies are impacted by labour shortages, only 29% are looking to improved HR for the answers. Respondents report that they have issues with recruitment, productivity and retention but there is little evidence to suggest there are steps being taken to address them.

On a positive note, the majority of businesses surveyed have recently written or reviewed their strategic plan for the future—almost half within the last six months. However, only 43% had established targets and measured against them.

“At times of prosperity it is important to monitor all parts of the business," says Andrew. “An accurate picture of the current reality allows for informed choices when executing on strategy. Companies should review their strategy and consider ways to ensure that their business model does not rely long term on economic growth at these current levels.”

Further evidence of the lack of management’s preparedness for the future is found in their approach to management succession. Over half the companies surveyed had some or all of their senior management aiming to retire in the next five years. But a worrying few have a succession plan for senior roles. Ninety percent of those companies with no succession plans at all were family or owner-managed businesses. For those companies who do have a succession plan, the survey shows that these plans lack detail and do not include timelines or communication policies to staff and the broader community.

The Business Insights Survey examines issues affecting Canadian private companies. In May and June 2006, 534 participants from across Canada completed the survey. Business leaders from a broad range of industries, sizes and locations were questioned on the issue of growth. This issue was selected based on its importance to the Canadian economy and following input from private company leaders.

WATELROO - Brick Brewing Co. Limited President & CEO Doug Berchtold announced September 20, 2006 that Brick has been selected to receive a 2006 Award of Distinction. The Ontario Chamber of Commerce and the Premier of Ontario will present this prestigious award to Brick Brewery in a ceremony before approximately 1,000 key business and political leaders at the Metro Toronto Convention Centre, on November 14, 2006.

We are extremely proud to receive this prestigious award from the Ontario Chamber of Commerce. For us, this award validates the significant progress Brick has made in developing a winning strategy in the highly competitive Ontario beer market. It is also a testament to the progress that all Ontario owned small brewers have made in continuing to innovate and survive in a provincial market increasingly dominated by powerful global brewers. Brick Brewery helped to found the Ontario Craft Brewers Association. Today, the 30+ small brewers of Ontario employ more that 450 people and account for over 20% of all direct brewery employment in the province.

"In the past 24 months, Brick has hired over 40 new employees, opened a state of the art, 100,000 square foot distribution packaging and warehousing centre as well as increased its sales volume by over 500%. These achievements are a source of pride for all of us," said Berchtold.

"Bricks' corporate values of innovation and entrepreneurial spirit have been critical to our success", said Jim Brickman, Executive Chairman and Founder of Brick. "It's nice to see that we are finally being acknowledged for all of our hard work.

"Ontario's success is dependant on having a strong, vibrant business community," said Len Crispino, President and CEO of the Ontario Chamber of Commerce. "Brick Brewing is a shining example of the best this province has to offer."

The OCC represents over 57,000 businesses through 160 local Chambers of Commerce and Boards of Trade, and has been Ontario's business advocate since 1911. Its advocacy and policy initiatives focus on six areas key to the economic well-being of the province: health; education; energy; finance & taxation; transportation & infrastructure; and border issues.

Canadian manufacturers must confront new challenges to realize growth opportunities

TORONTO - In a new report "Innovation in Emerging Markets: Strategies for achieving commercial success", released September 19 by member firms of Deloitte, more than half of the global manufacturers surveyed expect to substantially grow revenues in emerging markets over the next three years, with nearly three-quarters anticipating significant increases in China. However, the findings were revealed that only 23% of respondents are optimistic about prospects in developed markets.

Luc Martin, Canada's Manufacturing Industry Leader for Deloitte notes, "The most profitable global manufacturers are using emerging markets as the catalysts for new product and service innovation. Canadian manufacturers need to recognize the challenges, if they are to realize the enormous potential of these emerging economies, such as those in China, India and Russia. Long-term success requires more than simply tinkering with existing products, lowering prices, and developing new sales channels. Manufacturers must understand the unique needs of each local market and develop new offerings accordingly."

The research report based on a global survey and in-depth interviews of more than 400 senior executives at global manufacturers shows that only 29% of the companies surveyed enjoyed higher margins in emerging markets than in developed ones. Of those that did, 54% provided different product features to the ones offered in their home markets, compared to 43% of those whose margins were the same or lower.

Five Challenges

Deloitte has identified five major challenges that Canadian manufacturing companies with global aspirations must tackle to achieve success in emerging markets:

Build new value propositions to deliver different product offerings that meet the unique needs of emerging market customers. In many cases, this will be at dramatically lower price points than in developed markets. Martin adds: "The most successful manufacturers offer products at dramatically lower prices that match the lower purchasing power of most buyers in emerging markets."

Globalize research and development ("R&D") by locating R&D facilities in emerging markets to acquire deeper customer knowledge, and build, market and distribute tailored products. 49% of the companies selling new products conducted R&D locally. The executives surveyed cited 'better understanding of the local market', 'faster time to market' and 'lower R&D costs' as the top three reasons for conducting R&D in emerging markets.

Tailor talent management strategies to the unique needs of employees in emerging markets, rethinking how to effectively recruit, develop, deploy and connect people.

Master the complexity of Global value chains to provide autonomy at the local level while leveraging the strengths of headquarters, including governance and management know-how.

Build risk management capabilities to effectively detect, correct and manage the unique profile of risks presented by emerging markets, such as the protection of intellectual property.

The "Innovation in Emerging Markets: Strategies for achieving commercial success" is available at www.deloitte.com/manufacturing.

Montreal - To enable Canadian textile companies to be current with new and upcoming trends and to seize business opportunities in China, Team Textile Canada: is proud to announce the opening of a Textile Canada Business Centre (TCBC) in Shanghai on September 21, 2006.

Having an office in China, the Canadian textile industry will be able to anticipate market trends and upcoming technologies while promoting Canadian textile companies' expertise, products and services to Chinese buyers.

Because Team Textile Canada will be part of the Cinte Techtextil China 2006: tradeshow and conference from September 19-21, 2006, project coordinators have orchestrated both activities to maximise networking opportunities and the promotion of participating Canadian companies. For significant impact and long-term viability, Team Textile Canada's Chinese representatives will organise many trade activities in addition to ensuring continuous follow-up onsite.

Initiated by the CTT Group, this initiative results from a close collaboration with Industry Canada: , International Trade Canada: and the Ministère du Développement économique, de l'Innovation et de l'Exportation du Québec (MDEIE: ).

"After identifying many business opportunities in China during a trade mission to Shanghai and a visit to Canada by a Chinese business delegation in 2004, Team Textile Canada's representatives started looking for ways to empower Canadian companies to enable them to seize the opportunity" said Richard Cormier, Team Textile Canada leader and Vice President of the CTT Group.

Ambitious and realistic

A few years ago, instead of being victims of market globalisation, Canadian textile industry leaders turned to Team Textile Canada and its partners to identify new market alternatives.

As a result of an intensive market study produced for the CTT Group by Co-Strategy, many high-potential markets have been identified in China. Since Chinese manufacturers focus on mass production, they neglect to produce smaller orders and non-commodity products to meet the value-added textile, technical textile and smart textile needs of Chinese customers.

• The technical textiles market represented a $30 billion US market in 2005

• Technical textiles used in the geotextile, protection, transportation and medical sectors demonstrate the highest and fastest growth rate in China

About the Textile Canada Business Centre (TCBC) in Shanghai

The Textile Canada Business Centre (TCBC) in Shanghai will offer a wide variety of services to Canadian exporters seeking to sell to this new market. In addition to benefiting from a permanent address in Shanghai, the Asian textile capital, participating companies will benefit from the following services onsite:

• Access to a private workspace (permanent or on-demand)

• Permanent showroom (product exhibition and literature)

• Pre-organized activities to stimulate demand for Canadian products

• Access to professional services (receptionist, translators, sales support, etc.)

• Access to business services (conference room, fax, email, translation, etc.)

• Direct access to government services

About the CTT Group

Serving the textile, geosynthetic and polymer industries, the CTT Group is a not-for-profit organisation whose mission consists of supporting the growth and success of Canadian companies on the local, national and international stages. To stimulate innovation, improve productivity and help increase profits for Canadian businesses, the CTT Group offers a complete range of technical, commercial and information services (www.gcttg.com: ).

The CTT Group offers its members a multidisciplinary team of experts working in compliance with ISO 9001:2000 and ISO 17025 standards, state-of-the-art laboratories, along with advanced tools and technologies to support the creation and application of new products.

• Research & Development (creating, improving, diversifying products and applications)

• Laboratory Testing (quality control, product analysis)

• Technical Expertise (technical and legal consulting, standards development)

• Commercial Services (market research & analysis, consulting)

• Trade Events (networking, trade missions & shows, commercial delegations, conferences)

• Publishing & Education (The Textile Journal and Buyers Guide, directories, infogeos.com, e-newsletters,

seminars, training, technology monitoring)