{"id":139554,"date":"2025-09-12T21:54:09","date_gmt":"2025-09-12T21:54:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/139554\/"},"modified":"2025-09-12T21:54:09","modified_gmt":"2025-09-12T21:54:09","slug":"canada-the-industrial-implosion-v-the-united-states","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/139554\/","title":{"rendered":"\u201cCanada: The Industrial Implosion\u201d v. the United States"},"content":{"rendered":"

\t\t Stunning charts of how investment in industrial machinery & equipment collapsed a decade ago in Canada but stayed on track in the US.
\nBy\u00a0Wolf Richter<\/a>\u00a0for\u00a0WOLF STREET<\/a>.<\/p>\n

\u201cAccording to the latest national accounts data, real investment in industrial machinery & equipment [in Canada] fell in Q2 to its lowest level on record (data back to 1981). As today\u2019s Hot Chart shows, the divergence with the U.S. is nothing short of appalling,\u201d wrote St\u00e9fane Marion and Matthieu Arseneau, at Economics and Strategy<\/a>, National Bank of Canada, in a note sent to subscribers today.<\/p>\n

\u201cHow did we get here? Years of excessive regulation, and a chronic lack of ambition by successive governments in promoting domestic transformation of our natural resources\u2014recently made worse by Washington\u2019s protectionist agenda,\u201d they wrote.<\/p>\n

Their note included this stunning chart of investment in industrial machinery and equipment in the US and in Canada. Investment in both countries had roughly tracked on a similar trend in for decades through 2012, and then the bottom fell out in Canada, while investment in the US continued roughly along trend.<\/p>\n

\"\"<\/p>\n

The analysts wrote in their note: \u201cWe\u2019ve written about the plight of Canada\u2019s industrial sector [here<\/a>, here<\/a>, and here<\/a>].\u201d The first of their linked reports includes these two charts:<\/p>\n

Private nonresidential investment, inflation adjusted:<\/p>\n

\"\"<\/p>\n

Net capital stock in manufacturing, inflation adjusted:<\/p>\n

\"\"<\/p>\n

In their note today, the analysts wrote:<\/p>\n

\u201cThat failure has eroded Canada\u2019s manufacturing base and left us at risk of becoming irrelevant in global supply chains. To Ottawa\u2019s credit, the pledge to quickly ramp up military spending to 3.5%\u20135% of GDP could help catalyze a reindustrialization. But time is of the essence\u2014if we are to salvage what\u2019s left of the sector. <\/p>\n

\u201cWhat Canada needs is a wartime multi-pronged strategy that ends the dithering: a competitive tax regime, a sweeping reduction in red tape, and clear laws on how we intend to develop our natural resources. Clarence Decatur Howe\u2014the architect of Canadian industrialization\u2014showed what determined leadership can achieve. Canada must now draw on that inspiration to rebuild its industrial base before it\u2019s too late.\u201d<\/p>\n

But Canada sure knows who to invest in, push, promote, subsidize, and build a housing bubble that ranks among the world\u2019s most splendid, if not the most splendid, that not even the Financial Crisis could slow for more than a couple of quarters, but that has now run into trouble, at least in Greater Toronto<\/a>:<\/p>\n

\"\"<\/p>\n

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how:<\/p>\n

\n\"\"<\/a>\n<\/p>\n

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