--- canonical_url: "https://csls.ca/research/explanations-of-the-decline-in-manufacturing-employment-in-canada/" title: "Explanations of the Decline in Manufacturing Employment in Canada" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-02T12:51:28+00:00" date_modified: "2026-07-02T12:51:28+00:00" post_type: "research" summary: "" post_tag: - "Canada" - "Canadian dollar" - "China competition" - "deindustrialization" - "Dutch disease" - "exports" - "labour productivity" - "manufacturing employment" country_focus: - "Canada" province_region: - "National" research_theme: - "Labour Markets" - "Sector/Industry Analysis" featured_image: "https://csls.ca/wp-content/uploads/2026/07/old-reports_hero_banner_bg.webp" status: "publish" --- # Explanations of the Decline in Manufacturing Employment in Canada Canonical URL: https://csls.ca/research/explanations-of-the-decline-in-manufacturing-employment-in-canada/ # Explanations of the Decline in Manufacturing Employment in Canada [Download full PDF report](https://csls.ca/pdf/csls2015-17-1.pdf) Cite this report × Cite this report as: Capeluck, Evan. 2015. “Explanations of the Decline in Manufacturing Employment in Canada.” CSLS Research Report 2015-17. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/explanations-of-the-decline-in-manufacturing-employment-in-canada/ ## Author: - Evan Capeluck Norman Paterson School of International Affairs, Carleton University ## Report 2015-17 October 2015 38 pages ## Related research [Measuring the Appropriate Outcomes for Better Decision-Making: A Framework to Guide the Analysis of Health Policy Matthew Calver March 2016 | Report 2016-03 | 132 pages](https://csls.ca/research/measuring-the-appropriate-outcomes-for-better-decision-making-a-framework-to-guide-the-analysis-of-health-policy-2016-03/) [Living Standards Domain of the Canadian Index of Wellbeing Andrew Sharpe, Christopher Ross November 2011 | Report 2011-17 | 124 pages](https://csls.ca/research/living-standards-domain-of-the-canadian-index-of-wellbeing-2011-17/) [Productivity: Key to Economic Success Centre for the Study of Living Standards (CSLS) March 1998 | Report 1998-01 | 99 pages](https://csls.ca/research/productivity-key-to-economic-success/) [Productivity Trends: A Canada-U.S. Comparison Centre for the Study of Living Standards (CSLS) January 1999 | Report 1999-01 | 6 pages](https://csls.ca/research/productivity-trends-a-canada-u-s-comparison/) [New Estimates of Manufacturing Productivity Growth for Canada and the United States Andrew Sharpe March 1999 | Report 1999-02 | 21 pages](https://csls.ca/research/new-estimates-of-manufacturing-productivity-growth-for-canada-and-the-united-states/) [Apprenticeship in Canada: A Training System Under Siege? Andrew Sharpe December 1999 | Report 1999-03 | 59 pages](https://csls.ca/research/apprenticeship-in-canadaa-training-system-under-siege/) [A Survey of Indicators of Economic and Social Well-being Andrew Sharpe July 1999 | Report 1999-cprn | 72 pages](https://csls.ca/research/a-survey-of-indicators-of-economic-and-social-well-being/) [Creating a More Efficient Labour Market Centre for the Study of Living Standards (CSLS) June 2001 | Report 2001-02 | 147 pages](https://csls.ca/research/creating-a-more-efficient-labour-market/) [Productivity Trends in the Construction Sector: A Case of Lagging Technical Progress Centre for the Study of Living Standards (CSLS) November 2001 | Report 2001-03 | 177 pages](https://csls.ca/research/productivity-trends-in-the-construction-sector-a-case-of-lagging-technical-progress/) [The Impact of the National Child Benefit Supplement on the Low Income Status of Canadian Families with Children: The SPSD/M Results Centre for the Study of Living Standards (CSLS) June 2002 | Report 2002-01 | 59 pages](https://csls.ca/research/the-impact-of-the-national-child-benefit-supplement-on-the-low-income-status-of-canadian-families-with-children-the-spsd-m-results/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn The objective of this report is to examine the reasons for the decline in manufacturing’s employment share in Canada, with particular attention paid to the roles of labour productivity growth, demand-side factors, and outsourcing. The results of the report suggest that aboveaverage labour productivity growth explains most of the decline in the manufacturing employment share before 2000, while below-average real output growth explains most of the decline after 2000. The slowdown in real output growth after 2000 reflects the sector’s poor export performance which is related to many factors, including: a loss in cost competitiveness linked to an appreciation of the Canadian dollar; increased competition in the U.S. import market; and a slowdown in domestic demand growth in the United States. However, the story becomes more complicated when manufacturing employment is broken down into its various components. In particular, the evolution of manufacturing employment was, in different periods, largely driven by the fortunes of specific industries. L’objectif de ce rapport est d’examiner les raisons du déclin de la part de l’emploi manufacturier au Canada, en accordant une attention particulière au rôle de la croissance de la productivité du travail, des facteurs liés à la demande, et de l’externalisation. Les résultats du rapport suggèrent qu’une croissance de la productivité du travail supérieure à la moyenne explique l’essentiel du déclin de la part de l’emploi manufacturier avant 2000, tandis qu’une croissance de la production réelle inférieure à la moyenne explique l’essentiel du déclin après 2000. Le ralentissement de la croissance de la production réelle après 2000 reflète la faible performance du secteur à l’exportation, attribuable à de nombreux facteurs, notamment : une perte de compétitivité-coût liée à l’appréciation du dollar canadien; une concurrence accrue sur le marché américain des importations; et un ralentissement de la croissance de la demande intérieure aux États-Unis. Cependant, la situation se complique lorsque l’emploi manufacturier est décomposé selon ses diverses composantes. En particulier, l’évolution de l’emploi manufacturier a été, selon les périodes, largement déterminée par le sort de certaines industries en particulier. [Download full PDF report](https://csls.ca/pdf/csls2015-17-1.pdf)