Québec manufacturing SMEs have on average eight positions to fill

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MONTREALMay 9, 2019 /CNW Telbec/ – According to the latest results from STIQ’s Baromètre industriel québécois (Quebec Industrial Barometer), SMEs continue to suffer from a labour shortage, to the point where it is compromising the growth of some of them. The number of positions to fill represents on average 15% of the total number of employees, ranging from 10% for companies with 100 to 500 employees to 21% for those with 10 to 19 employees. Small businesses are thus twice as affected by the labour shortage as the larger companies. The study also shows that 83% of respondents say they are concerned about skilled labour recruitment problems, while three quarters consider succession to be a major issue, such levels have not been seen in the last 10 years.

“The 500 surveyed businesses alone have 4,000 positions to fill in 2019. Although there is no miracle solution, the labour shortage is prompting businesses to be more innovative in their recruitment efforts, improve their employee management practices and make their organization more attractive to young people,” says Richard Blanchet, President and CEO of STIQ.

A growing manufacturing sector

Overall, the manufacturing sector saw substantial growth in 2018. According to the Baromètre survey of 500 businesses with 10 to 500 employees, 63% of respondent SMEs posted a significant increase in sales from 2017, which was already a record year for many of them. In addition, after relative stagnation from 2015 to 2017, Quebec’s international exports jumped in 2018 to $92 billionin current dollars. Close to 80% of respondent companies had sales outside Quebec in 2018.

Although sales are strong, it is another story for new business development. In 2018, only one quarter of survey respondents reported that more than 10% of their sales was generated by new customers, the lowest percentage in 10 years.

“At first sight, this might seem to be a weakness or a problem, but this is not the case according to the SME managers we consulted in a focus group. They say that this is the result of a strategic choice, that many companies are already having difficulties filling orders from their current clients, and that they have don’t have the time or the resources to develop new customers,” explains Mr. Blanchet.

Digital technologies: despite progress, much remains to be done

The 10th edition of the Baromètre shows that three quarters of manufacturing SMEs have integrated or plan to integrate digital technologies into their processes. Companies that have begun transitioning to Industry 4.0 had stronger revenue growth, are more likely to hire and to export, are more innovative and are more likely to establish partnerships with other companies.

“The degree of digital technology integration varies considerably according to the size of the company. More than 40% of SMEs with 10 to 19 employees have not integrated or do not plan to integrate any digital technology, even a single one, versus only 15% for those with 100 to 500 employees. Small businesses are thus significantly behind in their digital transformation,” says Mr. Blanchet.

Investment:  a proven path to profitability

The situation has long been known: Québec manufacturing SMEs do not invest enough, which affects their productivity and their competitiveness. Yet investment pays off! Businesses that invest heavily in equipment, R&D and ICT are more likely to enjoy strong sales growth and to sell outside Quebec.

In terms of innovation, the performance of our SMEs is relatively good. A large majority (90%) of companies have taken one or more innovative actions in the past three years. Once again, the results of the Baromètre are conclusive: highly innovative businesses, regardless of their size, are more competitive than those that do not innovate, as evidenced by revenue growth, international sales and digital technology integration. These findings are confirmed year after year.

The Baromètre industriel québécois is ten years old. A decade during which we closely monitored, surveyed and analyzed the health of our manufacturing SMEs. A decade during which they have evolved considerably. Their skills have increased, they innovate more, and most of them have begun their digital transformation. These observations prompt us to look to the future with optimism.

As a long-time partner of the Baromètre industriel québécois, Investissement Québec recognizes the study’s importance and is delighted with the findings of the 2019 edition.

“Québec’s manufacturing industry plays a vital role in creating our collective wealth, and at Investissement Québec we have made it a top priority. We strive to support innovative companies that are embracing Industry 4.0 and putting the resources in place to make it work for them. We’re encouraged to see that the industry is growing and that entrepreneurs are committed to the path of innovation,” notes Investissement Québec President and CEO Guy LeBlanc.

To read the complete survey: STIQ.com

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