Canadian Occupational Projection System (COPS)
Industrial Summary
Textile, Clothing, Leather and Furniture
NAICS 3131-3133; 3141-3149; 3151-3159; 3161-3169; 3371-3379
This industry comprises establishments primarily engaged in manufacturing textiles, clothing, leather, and furniture and related products (such as kitchen cabinets, bathroom vanities and counters). Furniture and related products are the largest of the three segments, accounting for 67% of production in 2021, followed distantly by textiles (17%) and clothing (16%). Overall, more than 50% of the industry’s production is shipped to foreign countries, mostly to the United States which accounts for 90% of exports. Clothing is the most export intensive segment (85%), followed by textiles (50%) and furniture and related products (40%). All segments of the industry have also been facing a substantial increase in import penetration in both the Canadian and U.S. markets from low-cost producers, particularly from China. The industry employed 117,500 workers in 2021 (6.8% of total manufacturing employment), with 57% in furniture and related products, 30% in clothing and 14% in textiles. Employment is mostly concentrated in Ontario (37%) and Quebec (37%), with men accounting for the majority of the workforce (54%). Key occupations (4-digit NOC) include:[1]
- Furniture and fixture assemblers and inspectors (9532)
- Industrial sewing machine operators (9446)
- Supervisors, furniture and fixtures manufacturing (9224)
- Supervisors, textile, fabric, fur and leather products processing and manufacturing (9217)
- Furniture finishers and refinishers (9534)
- Other labourers in processing, manufacturing and utilities (9619)
- Woodworking machine operators (9437)
- Weavers, knitters and other fabric making occupations (9442)
- Industrial designers (2252)
- Labourers in textile processing (9616)
- Inspectors and graders, textile, fabric, fur and leather products manufacturing (9447)
- Textile fibre and yarn, hide and pelt processing machine operators and workers (9441)
- Cabinetmakers (7272)
- Fabric, fur and leather cutters (9445)
After peaking in the late 1990s, production and employment in the industry fell drastically during the following decade. This reflected various challenges faced by the industry over that period, including the intensification of competition from low-cost producers on the domestic and export markets; the reduction of trade barriers (more particularly the lifting of import quotas on textile, clothing and leather products in 2005); the strong appreciation of the Canadian dollar (which contributed to lower exports and increase imports); and the global recession of 2008-2009. Production and employment continued to decline from 2011 to 2014, albeit at a much slower pace, before rebounding modestly from 2015 to 2018. During those years, activity in the industry was supported by a restructuration of the textile and clothing segments toward high-value-added niche markets (which are less exposed to global competition) as well as the gradual recovery in North America’s residential investment and its positive impact on the furniture segment. The decline in the value of the Canadian dollar that followed the collapse in crude oil prices also helped to increase exports of textiles, clothing and furniture to the United States, which resulted in renewed growth in production and employment. Following a small dip in 2019, the output fell substantially in 2020 as major shutdowns at the onset of the COVID-19 pandemic disrupted production, erasing all the gains recorded from 2015 to 2018. Supported by increased demand for furniture in response to the substantial jump in residential investment, the industry’s output rebounded marginally in 2021, leaving production well below its pre-pandemic level. Those fluctuations lowered real GDP growth to an average of only 0.2% annually for the entire period 2012-2021. After reaching an historical low in 2015, employment temporarily rebounded in 2016, but returned to its negative path thereafter, resulting in an average decline of 0.4% per year. While the decreases in employment have been less severe in the past ten years, the industry has cut about half of its workforce since the early 2000’s due to the declining trend in production, largely attributable to the growing presence of low-cost producers on the domestic and export markets. In response to the intensification of global competition, manufacturers have restructured and consolidated their operations toward more value-added products, leading to an average increase of 0.6% annually in productivity during the last decade.
Over the period 2022-2031, output growth in textile, clothing, leather and furniture is projected to accelerate markedly relative to the previous ten years, with a large part of the gains occurring in the short term as the industry continues to recover from the pandemic. In the longer term, the industry should continue to benefit from the relatively low value of the Canadian dollar, which makes products manufactured in Canada more competitive relative to imports and contributes to support exports and domestic sales. Foreign demand is expected to be supported by the growing middle class and new market opportunities in emerging countries, particularly for high-end and luxury furniture. Canada’s unique expertise in developing and producing technical and smart textiles used in the construction, health care, defence and aerospace industries also represents promising opportunities. That said, although some of the restructuring has forced the industry to move up the value-added chain and develop specialized niche products, the penetration of new export markets will remain very challenging in this highly competitive industry. While the Canada-U.S.-Mexico Agreement (CUSMA) should ensure tariff-free access to the North American market, it also exposes Canadian producers to increased competition from Mexican manufacturers where labour costs are significantly lower.
On the domestic front, the industry will be challenged by the fact that growth in consumer spending on durable and semi-durable goods is projected to weaken progressively due to slower growth in disposable income (resulting from the gradual slowdown in Canada’s employment growth and massive retirements of baby-boomers. Higher interest rates are also expected to reduce consumer’s ability to finance new furniture purchases. A weaker outlook for new housing and resale activity is an additional factor expected to restrain domestic demand for furniture and related products. On a positive note, the continued expansion of e-commerce will allow apparel manufacturers to market their products directly to costumers, eliminating retail markups and some of the downside factors that the industry is currently facing. On average, real GDP is projected to grow by 2.2% annually over the period 2022-2031, recording a strong increase in 2022 and more moderate gains for the remainder of the projection period. The significant acceleration in output growth relative to the past decade is expected to lead to a modest rebound in employment, averaging 0.3% per year, with most of the increase occurring in 2022, as additional gains in productivity is expected to restrain job creation thereafter. Overall, productivity growth is expected to accelerate at an average pace of 1.9% annually, reflecting the need to lower production costs in this highly competitive environment and reduce the efficiency gap observed with most other manufacturing industries in the past several years. While some parts of the furniture segment remain intensive in labour (e.g. wood furniture), there is still room to increase automation in the textile and clothing segments.
Real GDP and Employment Growth Rates in Textile, Clothing, Leather and Furniture
Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.
Real GDP | Employment | |
---|---|---|
2012-2021 | 0.2 | -0.4 |
2022-2031 | 2.2 | 0.3 |
Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.
[1]Key occupations for manufacturing industries in general also include: Manufacturing managers (0911); Construction millwrights and industrial mechanics (7311); Material handlers (7452); Shippers and receivers (1521); Transport truck drivers (7511); Industrial engineering and manufacturing technologists and technicians (2233); Industrial electricians (7242); and Industrial and manufacturing engineers (2141).Back to text.