REGIONAL MANUFACTURING PROFILE

Transcription

1 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION Regina-Saskatoon 2014 Economic and Demographic Profile Population 574,768 Alberta Saskatchewan Manitoba Employment* 311,343 Manufacturing Share of Employment 5.3% Unemployment Rate 4% Real GDP ($2007 Millions) 34,055 Manufacturing Share of GDP 8% Manufacturing Hiring Requirement ( ) 3,600 Requirement Gap ( ) -200 *place of residence (POR) HIGHLIGHTS The Regina, Saskatoon Region will experience a manufacturing hiring requirement of 3,600 workers in the next 8 years. Although this requirement can be met by the new entrants to the labour force even minor shocks to the economy or shifts in the youth industry preference can tip the scale. Manufacturing hiring managers in the region are faced with: 1) A large demographic challenge: the manufacturing workforce is older than the overall labour force of the region. As these workers retire in the next 10 years, the manufacturing industry is projected to have difficulty filling skilled trades and technical positions. 2) Competition from other industries: occupations such as sheet metal workers, electrical and electronics engineers, and industrial mechanics are also highly demanded in other industries such as construction, utilities, and professional services. It will be especially difficult to attract those workers due to faster growth rates experienced by competing industries and higher wages offered in some cases (e.g., utilities and mining). 3) Fluctuating net migration: The Regina, Saskatoon Region s recruitment challenges may be exacerbated by the lack of sustained net migration. The Region critically depends on sustained levels of net migration to fulfill its manufacturing labour needs. 4) Occupational characteristics: some occupations are harder to fill across the manufacturing industry and the country due to low supply. The Regina, Saskatoon Region will be particularly challenged to find tool and die makers, mechanical trades supervisors, transport truck drivers, construction millwrights and industrial mechanics. Potential solutions to these recruitment challenges include increasing training and apprenticeship in the workplace, advocating for increases in government support for training, promoting manufacturing as a career option, and establishing training consortia.

2 THE REGINA-SASKATOON REGION The capital city of Regina and the city of Saskatoon are the two most population centers of Saskatchewan. Located 260 km or three hours drive from each other, Regina and Saskatoon are located within 7 hours drive from Winnipeg, Manitoba, in the west, and half a day drive from US state of North Dakota in the south. The Regina, Saskatoon economy was marginally impacted by the downturn of Although GDP growth slowed down, the region maintained positive growth (0.6) during the recession of 2009 and rebounded quickly to a growth rate of over 6 percent in Over the next three years, the real GDP is predicted to grow an estimated annual rate of 3.6 to 4.6 percent. Key sectors contributing to the local GDP include Finance, Insurance, Mining, Oil and Gas, Construction, Manufacturing, Wholesale Trade, and Government. Manufacturing accounts for 8 percent of the region s economic output and 5 percent of the employment. Manufacturing sectors of the economy experienced a year of stagnation in 2010 but quickly recovered in the following year and grew at an estimated rate of 8 percent in Real GDP Source: Prism Economics, Strategic Projections Inc. Industry Share of GDP, 2013 Source: Prism Economics, Strategic Projections Inc. 2 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

3 THE MANUFACTURING OUTLOOK Growth in manufacturing output in 2013 has slowed down significantly compared to It s predicted that this sector faces a few years of sluggish growth at a steady annual rate of just above zero until Still, current economic conditions present a positive environment for manufacturing to expand its output. The opportunities facing the industry include: Percentage Change (%) Favourable Canadian vs. U.S. dollar exchange rate Optimistic U.S. economic growth and therefore demand Decrease in fuel and therefore transportation costs Rising manufacturing machinery and equipment investment Strong demand for industrial machinery and steel Annual Change (%) in Manufacturing Output Source: Prism Economics, Strategic Projections Inc. On the other hand, industries such as Professional, Scientific, and Technical Services, Construction, Information and Culture, Retail, and Wholesale Trades are gaining momentum. These sectors are predicted to grow at an estimated annual rate of above 6 percent over the next five years. Finance and Insurance sector, as the greatest contributor to the local GDP, is expected to grow at a rate of 5.2 percent while Mining, Oil and Gas, as the second largest sector in terms of output, is falling behind, growing at a projected rate of 2 percent per year over the next five years. Annual Average GDP Growth by Industry, Regina-Saskatoon Region, Source: Prism Economics, Strategic Projections Inc. REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 3

4 The growth of competing industries are expected to translate into higher labour demand. This will create significant recruitment challenges for manufacturing, especially for the occupations that are also needed by other growing industries such as professional services (i.e. electrical engineers), construction (i.e. construction millwrights and industrial mechanics), and transportation and warehousing (i.e. transport truck drivers). RISING INVESTMENT IN MANUFACTURING AND RISING PRODUCTIVITY OF THE MANUFACTURING WORKFORCE Since the recession hit its lowest point in 2009, manufacturing in Saskatchewan has been investing heavily in machinery and equipment. The chart below displays data on the province which experienced a sharp increase in investment between the years However, the rise in investment did not transform into a similar increase in employment. In fact, the rise in manufacturing output can largely be explained by increasing productivity of the manufacturing workforce 1. Manufacturing Output and Employment, 1991 to 2013 Source: Prism Economics, Statistics Canada POPULATION, DEMOGRAPHICS AND LABOUR FORCE Population Region years Growth Rate ( ) Regina-Saskatoon 477, , , % Source: Prism Economics, Strategic Projections Inc. 1 It should be noted that increased investment most likely saved jobs in the manufacturing industry. 4 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

5 The population in the Regina, Saskatoon Region has grown by 85,543, an increase of 18 percent, between 2006 and 2013 on an annual average rate of 12,220 people per year. Projections for the region indicate that, growing at an annual average rate of 2.3%, the population will reach 628,185 by Persons 35 to 44 will be the greatest contributors to population growth over the next decade as the segment is growing rapidly at an annual rate of 7 percent. The senior population will grow by 5 percent growth per year in until Age distribution of Regina-Saskatoon Region Population, Population Source: Prism Economics, Strategic Projections Inc. THE DEMOGRAPHICS OF THE MANUFACTURING WORKFORCE The aging manufacturing demographics is equally pronounced as the overall aging population of the region. The following chart illustrates the age distribution of the manufacturing workforce and the total working age population in Saskatchewan. The manufacturing workforce is age-balanced with younger and older workers having similar shares in the total manufacturing employment. Regina-Saskatoon, Manufacturing Demographic Distribution Source: Prism Economics, Statistics Canada REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 5

6 The Manufacturing workforce is somewhat older compared to other industries in the region and will face higher replacement demands in the coming years. With half of the manufacturing workforce over the age of 45, employers can expect to replace a fifth of their experienced workers over the next 10 years. Age distribution of the Regina-Saskatoon Region Labour Force, Manufacturing and Total (Excluding Manufacturing) Source: Prism Economics, Statistics Canada, National Household Survey 2011 THE MANUFACTURING LABOUR FORCE IN REGINA, SASKATOON IS OLDER THAN THE OVERALL WORKING AGE POPULATION. THE INDUSTRY WILL FACE RECRUITMENT CHALLENGES AS A LARGE NUMBER OF WORKERS RETIRES DURING THE NEXT DECADE. In addition to growth related workforce requirements, Saskatchewan s manufacturing sector faces significant competition for workers from construction and engineering sectors of the local economy. The recruitment challenges are made greater by the older age profile of the local manufacturing workforce, meaning more retiring workers will need to be replaced in the manufacturing than other sectors in the local economy. Growing demands in key segments of manufacturing and competition from sectors such as construction, utilities and engineering will restrict labour availability. Employers will increasingly need to recruit from outside the local labour market to meet labour demands. 6 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

7 IS POPULATION GROWTH STRONG ENOUGH TO MEET THE LABOUR DEMAND? In Regina, Saskatoon Region, births have outnumbered deaths by over 40 percent each year over the past five years, resulting in a birth rate almost twice as high as the death rate. Although this may signal a fairly robust population growth, with a high participation rate of nearly 70 percent and a falling unemployment rate, the region relies on positive net migration to meet the labour demand of a growing economy. It is predicted that Regina, Saskatoon Region will attract, on average, over 9,000 migrants each year from 2014 to The following chart illustrates the annual change in the region s population. The chart shows the annual number of births, deaths and the net-migration required (people moving in and out of the region) to meet population requirements. The Region needs to develop strategies in order to attract a relatively high number of migrants and keep them in the longer term. Components of Annual Change in Regina-Saskatoon Region Labour Force, Source: Prism Economics, Strategic Projections Inc. REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 7

8 COMMUTERS TO JOBS IN REGINA FROM NEARBY COMMUNITIES The vast majority of Regina s employees reside within the city itself, as evidenced in the map above. Commuters reside predominantly in surrounding communities including Pilot Butte and Moose Jaw. Smaller numbers of Regina s employees live further afield, as far as Saskatoon, aided by strong road infrastructure. Source: Prism Economics, Statistics Canada COMMUTERS TO JOBS IN SASKATOON FROM NEARBY COMMUNITIES Employees in Saskatoon are strongly condensed to the local area. The majority of Saskatoon s employees reside within the city itself or in Martensville located directly north of the city. Most commuters reside in the areas directly surrounding the city including Warman, Osler, Corman Park and Asquith. Smaller segments of commuters reside slightly further afield to the east in Aberdeen, Blucher and Clavet. Source: Prism Economics, Statistics Canada 8 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

9 STRONG ECONOMIC GROWTH, POTENTIAL LABOUR SHORTAGE Employment in the Regina, Saskatoon area, growing an annual rate of 3.2 percent, has exceeded the growth in the labour force of 2.9 percent over the past three years. The region is predicted to create over 9,100 jobs on average per year until 2016 while the labour force will increase by just over 7,900 per year over the same period. This results in a falling unemployment rate which is expected to be 2.9 percent by 2016 well below the predicted national average of 6 percent. This trend in job creation cannot be sustained without additional working age population in the region. Labour Force, Employment and Unemployment Rate, All Industries Regina-Saskatoon Region, Source: Prism Economics, Strategic Projections Inc. REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 9

10 THE REGION NEEDS TO ATTRACT PEOPLE WITH THE RIGHT SKILLS The 25 to 44 age demographic is an important source of new hires for employers. The educational attainment of this demographic provides insight into general qualifications and planned career paths. Educational attainment in the region is distinct from the provincial average in educational attainment below college or above bachelor levels. The share of the population attaining high school has been declining to below the Saskatchewan average in The share of individuals completing an apprenticeship certification has remained steady and was below the provincial average of 13 percent in Comparing data from the 2006 and 2011 Census, the share of individuals aged between 25 and 44 attaining certificates at the college level has been declining while those who have completed a certificate or degree at or above bachelor level has risen to well above the provincial average. Regina-Saskatoon, Highest Level of Educational Attainment, 25 to 44 years Source: Prism Economics, Statistics Canada 10 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

11 MANUFACTURING EMPLOYMENT - REGINA In 2013, Petroleum and Coal, and Primary Metal manufacturers employed over 2,400 workers, or 36 percent of total manufacturing employment. Other manufacturing activities in the region include Machinery, Fabricated Metal, and Chemical Products, making up an additional 27 percent. Manufacturing Sub-sectors - Percentage of Total Manufacturing Employment, Regina, 2013 Source: Prism Economics, Strategic Projections Inc. MANUFACTURING EMPLOYMENT - SASKATOON Food and Machinery manufacturing comprise almost 40 percent of region s manufacturing workforce with total employments of 2,165 and 1,665 respectively in Fabricated Metal Products manufacturing with almost 1,200 employees is the third largest manufacturing sector in Saskatoon. Other manufacturing activities in the region include Furniture and Related Products manufacturing, Computer and Electronic Products, Chemical, and Miscellaneous manufacturing together comprising over 20% of the regional manufacturing employment. Manufacturing Sub-sectors - Percentage of Total Manufacturing Employment, Saskatoon, 2013 Source: Prism Economics, Strategic Projections Inc. REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 11

12 MANUFACTURING EMPLOYMENT FORECAST FOR THE REGINA, SASKATOON REGION Employment levels in the region s manufacturing industry have been in steady decline over the past decade. This decline came to a stop around 2011 when the industry started to recover from the recession. Although there has been a minor dip in employment in 2013, the overall trend for manufacturing has been positive since Forecasts of manufacturing output for the region project expansion during the next decade, which will translate into a slight increase in employment in the next few years. The upward trend will stabilize around 2018 and employment will reach a plateau after that. The following graphs illustrate the employment forecast for the top three manufacturing sectors in the region as well as the total manufacturing industry. Employment is expected to recover modestly during the next 8 years with minor increases in select industries. Total manufacturing employment in the region is expected to stay within the 16,000-17,000 band by Machinery manufacturing and fabricated metal manufacturing will exhibit a modest increase in employment. Food manufacturing employment will remain almost flat through the forecast period. Manufacturing Sub-sectors - Percentage of Total Manufacturing Employment Total Manufacturing Employment, Regina-Saskatoon, Source: Prism Economics, Statistics Canada. Food Manufacturing Employment, Regina-Saskatoon, Source: Prism Economics, Statistics Canada 12 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

13 Manufacturing Sub-sectors - Percentage of Total Manufacturing Employment Machinery Manufacturing Employment, Regina-Saskatoon, Source: Prism Economics, Statistics Canada. Fabricated Metal Manufacturing Employment, Regina-Saskatoon, Source: Prism Economics, Statistics Canada REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 13

14 PROFILE OF MANUFACTURING EMPLOYERS The Manufacturing sector in Regina, Saskatoon has four major components: Food, Machinery, Fabricated Metal Products, and Petroleum and Coal Products manufacturing. Sixty percent of the manufacturing enterprises in the region are small to medium size (less than 50 employees). Fabricated Metal Product manufacturing has the highest number establishments in the region (139 establishment) followed by Miscellaneous Manufacturing (123 establishments), and Machinery manufacturing (103 establishments). The number of Food manufacturing enterprises has declined from 129 in 2008 to 98 in According to Business Pattern data, the overall number of manufacturing establishments in Regina, Saskatoon Region has dropped by 6 percent over the past five years, from 930 in 2008 to 877 in Change in Number of Manufacturing Establishments Manufacturing Establishments by Employment Size Change in Number of Manufacturing Establishments, by Segment Source: Prism Economics, Statistics Canada 14 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

15 Largest Manufacturing Employers Regina Company Employees Industry Evraz Group 1,000 Primary metal Mosaic Canada ULC 1,000 Potash Mining Chemical manufacturing Imagination Ink Ltd. 811 Printing and Related Support Activities Consumers Co-op Refineries Ltd 800 Petroleum and Coal products Advance Engineered Products 700 Brandt Industries Ltd. 450 Transportation Equipment and Fabricated metal manufacturing Machinery - Agricultural Implement Manufacturing Mosaic Canada ULC 350 Alkali and Chlorine Manufacturing Brandt Engineered Products 250 Fabricated metal, Machinery manufacturing Leader Post 275 Printing and Related Support Activities Saskatoon Company Employees Industry Potash Corporation of Sask. 5,779 Potash Mining, Chemical manufacturing Federated Co-Operatives 3,000 Wood and Petroleum products Cameco Corporation 2,700 Primary metal New Holland Saskatoon 900 Machinery Maple Leaf Foods Inc. 500 Food manufacturing Vecima Networks Inc. 500 Computer and Electronic products Saputo Dairy Products Canada 300 Food manufacturing Hitachi Power Systems Canada 285 Fabricated metal products REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 15

16 MANUFACTURING LABOUR MARKET HIRING REQUIREMENTS The forecasts presented above are based on the projected needs of the manufacturing industry in the region. However, they only calculate the total manufacturing workforce, not the hiring requirement. Workers exiting the labour force also need to be taken into account in order to estimate the hiring requirements and the recruitment gap facing the industry. To solve this issue, the labour forecast model developed for this project examines demographics and estimates the number of workers who will retire or die over time, hence exiting the labour force and making up the replacement demand. Hiring requirement is then the summation of the replacement demand and the expansion demand. It is also the summation of the new entrants and the recruitment gap. The chart below summarizes the results of the labour forecast model for each of these categories. By 2023, the projected 4,115 individuals will enter the workforce to cover over 100% of the hiring requirements. However, new entrants only generate a minor buffer of 200 potential workers. Manufacturing employers can still face significant recruitment challenges even if a small portion of new entrants choose other industries over manufacturing or they simply stay out of the workforce for longer. DEFINITIONS Hiring Requirement: The number of workers needed to fill all the positions necessary for full-capacity production Recruitment Gap: The number of workers needed after new entrants to the workforce are taken into account New Entrants: Younger generations entering the labour force for the first time Replacement Demand: The number of workers needed to replace the retiring and others exiting the workforce Expansion Demand: The number of workers needed to add to the current workforce as the sector grows Hiring requirement = New Entrants + Recruitment Gap = Replacement Demand + Expansion Demand Labour Demand and Supply in Manufacturing, Regina-Saskatoon, 2014 Source: Prism Economics 16 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

17 Within the hiring requirement, some occupations are poised to be in more demand than others. These professions tend to concentrate on skilled trades and technical occupations. As the manufacturing industry is going through a transformation of technological advancement, the kinds of workers it needs in the future is quickly shifting towards more skilled labour. The next chart looks at replacement demand, expansion demand, new entrants, and recruitment gap. The following table illustrates some of the occupations that will be most in demand within the next 8 years in Regina, Saskatoon Region s manufacturing industry. Occupations Total Hiring Requirement Share of 2014 Employment Transport truck drivers 43 29% Construction millwrights and industrial mechanics % Industrial electricians 85 31% Plastics processing machine operators 18 22% Contractors and supervisors, machining, metal forming, shaping 31 22% Process control and machine operators, food, beverage 78 22% Tool and die makers 7 22% Material handlers 49 18% Labourers in food, beverage and associated products processing % Machinists and machining and tooling inspectors 57 15% Chemical technologists and technicians 23 16% Other labourers in processing, manufacturing and utilities 75 22% Electrical and electronics engineering technologists 24 17% Furniture and fixture assemblers and inspectors 27 29% Motor vehicle assemblers, inspectors and testers 38 32% Mechanical engineers 8 14% Welders and related machine operators % Industrial and manufacturing engineers 7 16% Electrical and electronics engineers 7 14% All Occupations in Manufacturing 3,600 22% REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 17

18 COMPETING DEMAND FROM OTHER INDUSTRIES In 2014, approximate 5 percent of the local workforce is employed in manufacturing. As employment in other industries grows, this share is likely to decline. Over time, competing employment demands from outside the manufacturing industry will make the attraction and retention of certain key trades and occupations increasingly more difficult for local manufacturers. The degree of difficulty will vary across occupational groups. Distribution of Employment by Occupational Category across Industries, 2014 Source: Prism Economics, Statistics Canada. PSM refers to professional services and management. The above chart illustrates the competition from construction, professional services, and other industries in hiring certain occupations that could present hiring challenges for manufacturing. These include: Sheet metal workers Industrial electricians Welders and related machine operators Construction millwrights and industrial mechanics Some industries in the region are better positioned than manufacturing to recruit the workers they need due to their projected faster growth and higher wages (e.g., mining, utilities). Competing demand for same occupations will be one of the major complications manufacturing hiring managers will face during the next decade. 18 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

19 The manufacturing industry in the Regina, Saskatoon Region may find itself at a disadvantage in hiring these workers compared to the utilities and professional services sectors because these are both projected to grow faster than manufacturing and may be paying higher wages to attract skilled workers. A quick look at wage differentials across industries in Saskatchewan suggests that utilities and mining tend to pay higher wages than other industries, and therefore can exacerbate manufacturing companies recruitment challenges. Wage Differentials across Industries, Saskatchewan, Source: Prism Economics, Statistics Canada REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 19

20 MANUFACTURING LABOUR MARKET SHORTAGE RANKINGS BY OCCUPATION The supply and demand labour market forecast model developed for this project generated forecasts for 45 manufacturing-related occupations. These forecasts estimate the labour demand for each occupation in the Regina, Saskatoon Region for the period. On the supply side, labour force exits (i.e. deaths and retirements) and new entrants (i.e. younger generations entering the labour force) were taken into account to create labour market shortage rankings for select occupations. The following chart is the legend describing the meaning of the ranks ranging between 1 and 5. a) Technical and Technologist Occupations and Managers Rankings A couple of technical and technologist occupations are projected to pose occasional and chronic recruitment challenges during the next few years. These include occupations such as senior managers, manufacturing managers, and electrical and electronics engineering technologists and technicians. These occupational categories will be harder to fill than others for the manufacturing industry due to competition from other industries, demographic challenges, and a limited labour supply. Human resources managers will need to widen their search beyond the region to find drafting technologists and electronics engineers during the next few years. The following chart ranks technical and technologist occupations and managerial positions in terms of recruitment challenges through the forecast period. 20 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

21 Technician and Technologist Occupations and Managers Rankings, Regina-Saskatoon, Source: Prism Economics b) Skilled Trades Occupations Rankings Similarly, several skilled trades occupations are projected to pose chronic recruitment challenges during the next few years. Professions such as tool and die makers, industrial electricians, and transport truck drivers will remain difficult to fill partly due to the lack of interest in skilled trades training in the region. These occupational categories will be harder to fill than others in the manufacturing industry due to competition from other industries, demographic challenges, and a limited labour supply. Human resources managers will need to widen their search beyond the region to find carpenters, mechanical trades supervisors, and construction millwrights during the next few years. The following chart ranks skilled trades occupations in terms of their recruitment challenges through the forecast period. REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 21

22 REGINA-SASKATOON Skilled Trades Occupations and Managers Rankings, Regina-Saskatoon, Source: Prism Economics 22 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

23 SURVEY RESULTS As part of the Regina, Saskatoon Region labour market forecast project, a survey among employers based in the region was conducted to assess their labour needs and perceived challenges. The survey results are not statistically significant due to small sample size. Nonetheless, they are informative and confirm the findings of the model described above. The occupations that survey respondents identified as posing significant recruitment challenges are similar to the occupations identified by the labour demand forecast model. Survey respondents are facing recruitment challenges in hiring predominantly skilled trades and technical occupations. The occupations cited by respondents are: Electricians (except industrial and power system) Machinists and machining and tooling inspectors Welders and related machine operators Industrial electricians Heavy-duty equipment mechanics Chemical technologists and technicians Civil engineering technologists and technicians Mechanical engineering technologists and technicians Industrial engineering and manufacturing technologists and technicians Electrical and electronics engineering technologists and technicians Industrial instrument technicians and mechanics Engineering inspectors and regulatory officers Survey respondents also revealed that paying above average wages lead to fewer recruitment challenges: Rankings, Hamilton-Niagara, Wages and Recruitment Challenges, Survey Results, 2014 REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 23

24 Finally, the Regina, Saskatoon Region (Saskatchewan) can be compared to other manufacturing hubs across the country in terms of recruitment challenges reported by employers in the survey: Recruitment Challenges across Manufacturing Regions, REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION

25 CONCLUDING REMARKS AND RECOMMENDATIONS The manufacturing industry in the Regina, Saskatoon Region is positioned for modest growth during the next decade. Output growth will not translate into large gains in employment due to increasing investment levels and rapidly improving productivity of the manufacturing labour force. As a result, the industry will not face severe recruitment challenges to fill new positions added to the manufacturing workforce. Instead, significant recruitment challenges will present themselves as a result of the retiring workforce. The manufacturing industry s demographics demonstrate a larger segment over the age of 55 than the overall working population. This will result in relatively high replacement demand during the next few years and even in the longer run. Recruitment challenges will not be ubiquitous across all occupations. As the manufacturing industry becomes more technologically advanced, the kinds of jobs needed to maintain full capacity output are shifting towards more skilled trades and technical occupations. Both model and survey results confirm this point, identifying these occupations as the main culprits of recruitment challenges now and in the projected future. Moreover, these recruitment challenges will be exacerbated by competition from other industries poised to grow faster. These industries include professional services, construction, and information and culture. Occupations needed by other industries which tend to pay higher wages (i.e. utilities, mining and oil extraction ) are especially prone to generating recruitment challenges for the manufacturing sector. Although the region seems to have no recruitment gap for the forecast period due to the high number of new entrants to the labour force, there is no guarantee that those workers will choose to work in manufacturing. Furthermore, the recruitment surplus is too small (only 200 additional workers) to support the manufacturing industry s additional labour needs in the case of increased demand or output, which is a likely scenario with the favourable CAD-USD exchange rate. Based on this state of the manufacturing labour force, the industry needs to respond as a whole before the recruitment challenges become unmanageable. Some potential solutions to the problem include: Increasing training and apprenticeship in your workplace Collaborating with other regional employers and stakeholders Advocating for increases in government support for training Working with educational institutions to ensure programs meet industry needs Promoting manufacturing as a career option Establishing training consortia REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION 25

26 This Regional Manufacturing Profile was prepared for the project Regional Labour Market Information to Address Skills and Human Resources Issues in the Manufacturing Sector. This project is sponsored by the Canadian Manufacturers & Exporters and the Canadian Skills Training and Employment Coalition. This project is funded by the Government of Canada s Sector Initiatives Program. The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada. REGIONAL MANUFACTURING PROFILE REGINA-SASKATOON REGION Prepared by Prism Economics & Analysis for: Canadian Manufacturers & Exporters & the Canadian Skills Training & Employment Coalition