As of 2004 the furniture industry in Canada employed some 92,810 persons, more than 44% higher than 10 years ago, but almost unchanged since the beginning of this century. The improvement from its 1993 recession low of just 59,559 is truly remarkable. In other words furniture industry employment has exhibited much resiliency, especially considering the impacts the industry faced since the early 1980s from Canada?s free trade agreement. The more recent employment decline is a reflection of the industry?s slowdown due to the strengthening Canadian dollar and more Asian competition.
The rise and subsequent fall affected predominantly production workers. Indeed, salaried/commissioned employees continued to rise during the past three years.
Interestingly, the number of firms in the furniture industry declined. In 1995 there were approximately 2500 furniture establishments in Canada, but a decade later it had fallen almost one-third to about 1700. Medium sized firms shrank relatively more than either large or small firms. This suggests that you either have to be big to compete internationally, or small and flexible to carve out a niche and survive.
As of 2005 the major furniture employer remains the household and institutional furniture and kitchen cabinet manufacturing segment with 61,105 employees or 60% of total employment in the furniture industry. This segment is followed by the office furniture segment with 34,453 employees or 34%. The ?other furniture segment? (which includes mattresses) accounts for only 6,334 employees or 6% of the total.
In 2005 Ontario accounted for 43% of all furniture employment, with Quebec accounting for 34%. The remaining 24% are scattered throughout the rest of the country, with Manitoba, Alberta and BC being the next most important provinces. Ontario dominates the office furniture, metal household furniture, upholstered household furniture and kitchen cabinets segments, while Quebec dominates in wooden household furniture.
When furniture employment is expressed as a percentage of the provinces? overall manufacturing employment, Manitoba at 10.2% had the largest portion of manufacturing employment devoted to furniture manufacturing. Manitoba is followed by Quebec with 6.3% of total manufacturing employment, well above the Canadian average of 5.2%. The percentage in most other provinces is below the national average.
The average furniture firm in Canada in 2005 employed 55 persons. By firm type the average number of employees ranges from a high of 102 in the office furniture segment to a low of 46 ion the household furniture segment. The furniture industry is dominated by a very few giants and a large number of very small companies. Well over three quarters of all establishments fall below the average of 55 employees. Only some 13% of establishments have 100 employees or more.
The degree of employment concentration has changed somewhat during the past decade, reflecting the adaptation of the industry to increased economy of scale production. Since the early 1990s recession the furniture industry?s real value added grew at a faster pace than employment. So furniture productivity has been growing quickly, no doubt propelled by a compelling need to use more labor saving technologies in today?s competitive environment
Increased automation and the adoption of new electronic and other processing technologies will lead to a continuing shift from low skill to high skill occupations. Shortages for skilled labor in the furniture industry persist to this day. The influx of skilled European labor has dwindled to a trickle, and Canada is not yet producing the required quantity and quality of skills from within its own ranks.
Between the early 80s and the early 90s there was the slight decline in real wages but following the recession in the 90s, there was a modest reversal of that trend. Assuming positive growth of the economy, real wages can be expected to continue to increase in the years to come. Furthermore, workers and managers will need more specialized skills, and such workers can only be attracted by higher pay rates.
The aging of the population will also drive wages to higher levels. The flow of young and relatively inexpensive workers will become less abundant. As a result, industry will be forced to increasingly engage more mature workers, who are invariably more expensive, but not necessarily more skilled, on modern machines. All of which suggests training and will take on added significance in the furniture industry over the decade ahead.
As of 2005 the average furniture industry production employee received $18.52 per hour compared to $20.60 per worker in manufacturing in general. Thus there is a 11.2% gap between the earnings of production workers in furniture and of production workers in manufacturing generally. In 1995, however, the gap was actually much wider at 36.0%, so a noticeable relative improvement in furniture production wage rates has occurred.
Average hourly earnings in the household segment always lagged behind those of the office furniture segment.
Stefan Wille
AKTRIN Furniture Information Center
Web: Employment and Wages in the Canadian Furniture Industry
1 comments:
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