Tough year for Canada's food processors

Thursday, September 20, 2012

by SUSAN MANN

The food manufacturing industry is struggling through a tough year, according to the Conference Board of Canada.

In its report, Canadian Industrial Outlook: Canada’s Food Manufacturing Industry, Summer 2012, released Thursday, the board says the slow recovery in the United States – Canada’s key export market – coupled with a significant run-up in commodity prices and a slowing Canadian job market have slowed the industry’s growth.

The industry’s gross domestic product is forecast to increase by only 0.5 per cent this year. Industry profits will rise slightly this year to $4.7 billion from $4.6 billion in 2011. Gross domestic product growth should improve in 2013, the board says.

Michael Burt, Conference board director industrial economic trends, says in a news release that food manufacturers are being squeezed by both costs and prices. “Input costs are rising due to a run-up in commodity prices and demands from retailers and consumers are limiting the ability of manufacturers to increase their own prices. The result is pressure on the industry’s profit margin.” BF