Food manufacturing may be recession-proof
In sharp contrast to other manufacturing industries, Canada's food manufacturing industry is showing that it is largely recession-proof.
In sharp contrast to other manufacturing industries, Canada’s food manufacturing industry is showing that it is largely recession-proof. Although the global economic slowdown is limiting growth, profits this year are forecast to come close to the record highs recorded in 2008, according to the Conference Board’s Canadian Industrial Outlook: Canada’s Food Manufacturing Industry – Winter 2009.
“Demand for everyday products such as food is not particularly sensitive to economic conditions, so the food manufacturing industry in Canada is expected to come through the economic turmoil without suffering too much,” said economist Valerie Poulin.
Food is one of the most overlooked components of the Canadian economy. Food and beverages are the single largest component of retail sales, and food processing is the largest component of Canada’s manufacturing sector in terms of jobs.
Food processors may be affected by changing tastes and diets, and consumers may choose cheaper products over premium ones, but total food consumption is not expected to drop significantly due to the recession.
Production of food products is expected to decrease by less than 1 percent in 2009. Profits are expected to fall from their peak of $4.6 billion in 2008 to $4.3 billion this year and remain close to that level throughout the next four years.