The survey, titled 'Made in North America,' polled the views of 321 top-tier executives of North American manufacturing companies representing a wide range of industries, and was designed to gauge how they are competing in a global economy. It was carried out with the cooperation of the National Association of Manufacturers (NAM), the Manufacturing Institute, and Canadian Manufacturers & Exporters (CME).

The majority of Canadian respondents to the Deloitte survey credit NAFTA with allowing them to access new and larger markets, and for improving their overall business performance. Although only one-third of Canadian companies believe they are currently competitive on a global scale, many more recognize the need for transformation through plans to expand a variety of operations in the global value chain, including sales and service, research and development (R&D), and sourcing.

The Deloitte survey showed that many believe that North America will become even more competitive by 2012 in: sales and marketing (45%), information technology (41%), customer service (37%), R&D/engineering (36%) and finance/accounting (34%). On the other hand, more than 60% of respondents hold the opposite view of production competitiveness, singling it out as the weakest link in the North American value chain.

“In the face of recent and highly publicized challenges here in Canada, the level of optimism about NAFTA and future competitiveness comes as both a surprise and a paradox,” commented Luc Martin, Deloitte partner and Canadian Manufacturing industry leader. “A near-parity currency environment, rising energy and commodity costs, turbulence in capital markets, as well as closures of major manufacturing facilities, are creating very tough times for Canadian companies,” he added.

Deloitte's survey shows that only 24% of respondents say that they plan to expand production in Canada, leading to the conclusion that industry is evolving to a state whereby actual production facilities are not necessarily located within the country's borders.

In order to adapt to this new reality and remain competitive, Deloitte argues that manufacturing industry must adopt a proactive global mindset and strategies that include reducing high labour costs through automation and innovation and attracting and retaining a globally mobile workforce through talent management and workforce planning.

“This survey demonstrates that manufacturers in North America share common challenges, as well as the urgent need for us to work together to find common solutions,” noted Jayson Myers, president of Canadian Manufacturers & Exporters. “In order to be successful on the global stage and to compete and win against the rest of the world, our main priority is to strengthen the North American market even further.”

According to Canadian respondents, the biggest barriers to competitiveness in North America are labour costs (84%), the exchange rate (80%), raw material prices (68%) and availability of skilled labour (63%). Labour policy and lack of harmonized border regulations round out the next biggest challenges to competitiveness for Canadian companies. These were the issues most frequently cited by respondents as areas that governments should address as matters of public policy.