Manufacturing SMEs that Plan and Invest are Higher Performers

MONTREAL, May 5, 2015 /CNW Telbec/ - The sixth annual Baromètre industriel québécois published today by STIQ reveals that Quebec-based manufacturing SMEs that make significant investments in strategic planning, equipment and R&D are higher performers. The study also highlights the need for manufacturers to diversify their markets and address the continuing shortage of skilled labour.  

It Pays to Invest

This year's Baromètre, which surveyed 400 Quebec manufacturing SMEs, highlights the inadequate levels of investment made in equipment and R&D while showing that companies with above-average investments perform better. In 2014, companies that invested heavily in equipment (more than 5% of their revenues) were twice as likely as those that invested a lesser amount (less than 2% of their revenues) to have increased their revenues by more than 20%. Moreover, 53% of those companies that invested significantly in R&D were selling internationally, while this was true of only 21% of respondents that reported lower levels of investment. This considerable gap confirms the decisive role investment plays in improving the competitiveness of our industries.

Plan to Get Ahead!

Only 57% of SMEs surveyed had conducted a strategic planning exercise in 2014, a statistic that has changed little since 2010. The percentage is relatively low when considering that a company that implements a strategic plan is almost twice as likely as its peers to have successfully expanded into foreign markets, and 25% more likely to attribute a significant proportion of their revenues to new customers. SMEs that planned strategically have also invested more and established a greater number of partnerships. These results show that strategic planning is essential for growth in manufacturing companies.

Diversify Markets

STIQ's study also reveals that Quebec-based companies face challenges with finding new customers. For a fifth consecutive year, the study found that six out of 10 companies saw less than 10% of their revenues generated by new customers. Furthermore, 33% of respondents attributed at least 50% of their revenues to their three largest customers. To safeguard against fluctuations in the economy, manufacturing SMEs must increase their efforts to diversify by developing business in new sectors or by focusing on exports, a potentially valuable avenue of growth at a time when domestic demand is almost stagnant.

Lack of Skilled Workers Is Stifling Growth

The industry has for several years sounded the alarm regarding the problem of labour shortages. The STIQ survey reveals that the situation is now becoming critical: in 2014, 74% of respondents experienced significant problems with regard to recruitment in 2014, compared to 66% in the previous year. "The lack of workers is the largest obstacle to the expansion of our business. We have the capital to buy machines, the space for them, in addition to customers and orders. The only thing we are lacking is human resources," said Jean Blanchet, director of Megatech, a Quebec-based SME that has turned to international recruitment to address the shortage of skilled labour.

Size Issues

The Baromètre industriel Québécois highlights the important issues facing manufacturing SMEs in the province. "They must follow the example set by industry leaders in setting clear objectives, by investing to increase productivity and by developing business in new sectors or overseas markets," said Richard Blanchet, STIQ's president and CEO. Mr. Blanchet also noted that "the shortage of skilled labour remains a major concern to manufacturers. The education sector, together with industry, must continue in its efforts to attract young people into the trades."

To view the complete study: Baromètre industriel Québécois, sixth edition (In French only)

About STIQ

STIQ is a multi-industry association of Quebec-based manufacturers whose mission is to improve the competitiveness of manufacturing supply chains in order to promote the development of our economy. In order to do so, STIQ offers many services and events designed to match manufacturing supply and demand. The organization also manages Podium, a supplier improvement program as well as customized IT solutions and targeted training activities.

 

SOURCE STIQ

Michelle Vyboh, Communications Coordinator, STIQ, Tel. : [phone], ext. 228, [email protected]; www.stiq.com ; @STIQReseau; For more information: Émilie Dutil-Bruneau, NATIONAL Public Relations, Tel.: [phone], Cell : 514-654-3180, [email protected]