Canadian Forest Sector Well Positioned for the Future

The Canadian forest products industry is well positioned for a bright future after making robust advances in labor productivity even while facing one of its worst downturns in history, according to A Detailed Analysis of Productivity Trends in the Canadian Forest Products Sector undertaken by the Centre for the Study of Living Standards (CSLS) for the Forest Products Association of Canada (FPAC), Vancouver, B.C., Canada. The independent study shows that between 2000 and 2012, labor productivity of the Canadian forest products industry grew at a compound annual rate of 2.5%, well above the overall Canadian business sector growth of 0.7%. The industry had the second highest labor productivity growth rate from 2000-2012 for all Canadian industry sectors.

 

"It is remarkable to see this excellent productivity performance considering the jolts that hit our industry since the beginning of the 21st Century," said David Lindsay, president and CEO of FPAC, in reference to an unprecedented confluence of near-term shocks such as the higher dollar and sluggish U.S. economy, and structural changes such as the precipitous drop in paper use in the wake of the digital revolution.

 

"These positive results speak to the resilience of our industry and the creativity and sound business decisions made by companies in the sector both pre- and post-recession," Lindsay added. "This study underscores how our companies weathered a difficult economic storm, leaving them well positioned to grow and seize opportunities in the days ahead."

 

FPAC says it believes that a renewed focus on leveraging productivity gains through investment and innovation is the key to the industry's future as the sector moves from an established commodity industry to a nimble green industry serving wider markets and driven by the opportunities of the emerging bio-age.

 

Building on the productivity performance will also help the industry reach the sector's Vision2020, including the ambitious goal of producing another $20 billion in economic activity and refreshing the workforce with 60,000 new recruits by the end of the decade.

 

"We now have a solid foundation for our transformation agenda, but we need to find ways to continue on this path of productivity to ensure the industry remains a major contributor to Canada's economy and job creation, especially in rural Canada. Industry needs to put its shoulder to the wheel and government needs to continue its strategic support for innovation," Lindsay concluded.

 

FPAC is recommending a renewed focus on investing in both human and physical capital as well as strong spending on research and development.

 

More information about FPAC is available online.