1. www.cme-mec.ca Industry Outlook November 2015

2. www.cme-mec.ca Manufacturing Matters in Canada  A $620 billion industry  12% of GDP (18% in 2004)  1.7 million direct employees (2.2 million in 2004)  The largest payroll of any business sector  Two-thirds of Canada’s goods & services exports  80% of private sector R&D  85% of patents commercialized in Canada  Every $1 of output generates $3.50 in total economic activity ($3.05 in 2004)  The business of providing customer solutions combining the production of goods, new technologies, and services

3. www.cme-mec.ca Manufacturing Sales in Canada

4. www.cme-mec.ca Canadian Export Performance

5. www.cme-mec.ca Economic Challenges & Opportunities  Opportunities  US economic recovery  Canadian dollar ($0.72 - $0.78 US)  Challenges  Financial turbulence  Slower growth in China and other “emerging markets”  Low/no growth in other major economies  Low commodity prices  Slow growth at home  Consumers  Housing  Governments  Business Investment

6. www.cme-mec.ca Manufacturing Sales by Province June 2015

7. www.cme-mec.ca Manufacturing Sales by Sector

8. www.cme-mec.ca Manufacturing Sales by Sector June 2015

9. www.cme-mec.ca Manufacturing Sales by Sector June 2015

10. www.cme-mec.ca Long Term Trends More demanding customers looking for solutions More demanding stakeholders – governments, investors, public More intense competition Infrastructure investment Social challenges = business opportunities – Health, ageing, climate, environment, food, water, energy Accelerating pace of technological change

11. www.cme-mec.ca A Revolution in Manufacturing Technology Industry 4.0 – Cyber-physical systems Advanced visualization, modeling, and artificial intelligence Digital, reconfigurable, and integrated automation, sensors, visual systems enabling product/process monitoring & control Internet of Things – “Internet of Value” Big data & quantum computing 3-D printing/Additive manufacturing Micromachining New materials – Lightweight, bio-nano-based, printable electronics & smart materials New energy – Generation, storage, propulsion

12. www.cme-mec.ca New Business Models Focus on customized solutions, not products Software and service-driven specialization New and rapidly reconfigurable design Shorter innovation cycles for more complex products with enhanced functionality Focus on efficient, sustainable use of resources throughout product life cycles Immediate response – rapid commercialization Enhanced flexibility Globally dispersed production Dynamic, real-time, globally integrated value creation networks

13. www.cme-mec.ca Strategic Priorities Leadership Specialized, customized solutions Analytics Technology adoption & management Lean People Risk management Collaboration Money

14. www.cme-mec.ca Critical Policy Issues Tax policies that facilitate rapid technological change Business growth & new investment Investments that enhance commercialization – Procurement, technology demonstration, & risk reduction Data security & global IP regimes Open markets (products, services, investment, people) Seem-less → Seamless borders Education & skills for Industry 4.0 workforce Access to reliable, cost competitive infrastructure (transportation, energy, innovation, IT & Telecom)