A recent Brock study may have just put an end to the doom and gloom scenario often painted about the Region’s manufacturing sector. Turns out there isn’t a need to plan a manufacturing funeral just yet. In fact, according to Sean Calcott and Charles Conteh there’s actually some good news.
Conteh, an Associate Professor of Political Science at Brock University and Director of the Niagara Community Observatory (NCO) admits the sector doesn’t look like it once did and it has gone through some challenging times. “But the general trend is that manufacturing has been very resilient, has stayed in the region and, in fact, has seen an upswing since 2012, so there’s a bit of a wind in our sails.”
Conteh is co-author of the NCO’s latest policy brief, “Shifting Gears: Examining the recent upswing of Niagara’s manufacturing sector.”
In their brief, Conteh and co-author Calcott, a recent master’s graduate in the Department of Political Science, examine Niagara’s recent economic history with fresh eyes, avoiding comparisons to the region of long ago.
The authors say the manufacturing landscape in Niagara has literally changed. “The strength of manufacturing in Niagara is not as visible to the naked eye as when large plants and factories were prominent in the sector,” says Calcott. “There is a multitude of small firms making diverse products that account for the bulk of the job growth in this sector.”
According to their research, Niagara’s manufacturing sector has continued to be a main driver of job growth and economic development over the past six years.
The report notes that, as of 2016, 243 manufacturing firms in Niagara exported goods totaling about $3.7 billion. Machinery, boilers, mechanical appliances, engines and parts accounted for about one-third of this total, with nickel, plastics, railway and tramway vehicles, parts and accessories also being significant exports.
One of the most shocking statistics in the report is that across the sector, manufacturing employment increased by 2,075 jobs between 2012 and 2018 with the largest increases in plastics and rubber products manufacturing (70 per cent), beverage and tobacco product manufacturing (44 per cent), chemical manufacturing (40 per cent) and transportation equipment manufacturing (23 per cent).
Conteh points out that Niagara has moved away from the “large branch-plant model” typical of the previous century, with manufacturing jobs being concentrated in small-to-medium size firms (SMEs) with fewer than 500 employees.
“SMEs present advantages over larger enterprises because their smaller footprint enables more risk-taking and innovation than firms which have invested greater resources into an established business model,” says the brief, adding that they can “adapt more quickly to changing market conditions.”
While the vast majority of the news is very positive for Niagara, there is one bit of negative news found in the brief. Wages today are generally lower than they were in the manufacturing sector of the past.
“The middle-tier of manufacturing jobs are being displaced by lower-paying positions, while higher-paying managerial and supervisory positions are stable,” says the brief.
To address this challenge, there is a recommendation to build upon the tremendous strides in education and skills training being offered in the region’s post-secondary institutions that would see “more investment in specialized industrial skills in targeted labour-intensive manufacturing sectors.”
The authors urge Niagara to align itself with the economies of Hamilton, the GTA and Buffalo. “This means building an integrated system of design and production nodes in a distributed network of interlocking supplier and customer firm relationships that spans the QEW industrial corridor and extends to the Buffalo market.”
It also calls for small and medium-sized entrepreneurs, venture capitalists, university and college researchers, economic development officials and others to come together to identify Niagara’s existing strengths and map out strategies to attract investment and build skills training.
Conteh says the take-away message from the NCO’s latest research is that Niagara’s manufacturing sector still forms the bedrock of the economy despite earlier upheavals, and has a bright future.
He says that when they started the research, he already had an “indication” of something positive happening, “but the compelling data gave us evidence beyond a shadow of a doubt that Niagara is resilient and has the adaptive capacity to weather storms.”