MGPS

MGPS

November 22, 2007 09:00 ET

MGPS: Manufacturing Job Losses Rising

TORONTO, ONTARIO--(Marketwire - Nov. 22, 2007) - Job losses have continued to mount in the manufacturing sector in both Canada and the United States. The strong Canadian dollar has been blamed for placing the Canadian Auto sector at a competitive disadvantage. The U.S. is a major export market for Canadian goods. A softening demand combined with an increase in loan delinquency has meant that increased costs cannot be easily passed on. Canada is now one of the most expensive places to build cars.

Canadian exporters are continuing to feel the pain of a strong dollar. However, while other exporting nations have resisted price increases, it is possible that their margins have been squeezed to the point where a price increase may be inevitable. Consumer prices in the U.S. rose 3.5% over the last 12 months.

Perhaps the fears of a recession are overstated and inflation will be the result. The weakening housing sector and tightening credit conditions seems to be driving fears of the former, while the relative buying power of the dollar is driving fears of the latter.

Meanwhile, in Canada, Consumer prices are dropping as retailers try to curb cross-border shopping. Prices are dropping in other areas as well. As a result some Canadian economists are calling on the Bank of Canada to raise interest rates.

If you are in the sectors that have been adversely affected by the weak U.S. dollar, you can either wait it out and hope for the best or take action now on areas that are within your control. There is never a better time than now to review expenses, suppliers, cost drivers and cost structures. You may not be able to fight the dollar but with sound expense management strategies, you can still minimize the impact of the dollar on your margins.

About MGPS

MGPS is a management consulting firm that specializes in reducing non-core expenses. These expenses tend to be indirect, hidden and scattered throughout the organization. MGPS identifies hidden costs and develops and implement efficient processes to drive out unnecessary expenses. The end result is increased cash flow and greater profitability.

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