Article

Surface Resilience, Underlying Vulnerabilities

These findings reveal a growing gap between apparent resilience and underlying fragility. Quebec manufacturing remains a cornerstone of the economy. However, relative productivity continues to decline, exports are weakening, and dependence on the U.S. market leaves many businesses vulnerable to disruptions beyond their control. In this environment, competitive advantage increasingly depends on an organization's ability to anticipate, prioritize, and act sooner than others.

The same pattern is evident on the commercial side. Revenue growth has slowed for a third consecutive year, directly affecting profitability: when sales decline, margins quickly come under pressure. This challenge is even more pronounced for companies with significant exposure to the U.S. market. External shocks rapidly translate into difficult trade-offs, postponed investments, and reduced capacity to transform the business.

Rather than being the root cause, U.S. protectionism has become a revealing stress test. Many companies are simultaneously pursuing new markets while investing in productivity improvements—a dual strategy that reflects an important realization. In an unstable environment, organizations cannot control everything, but they can deliberately strengthen their internal ability to execute, adapt, and make better decisions. Doing so, however, requires the right management framework.

Human Capital: Looking Beyond Recruitment

The human dimension also deserves renewed attention. Recruiting remains difficult, but succession planning and the transfer of critical knowledge are becoming increasingly strategic. Beyond workforce size, an organization's ability to preserve, transfer, and mobilize key expertise is emerging as a decisive competitive factor. Too many companies remain vulnerable when individuals holding critical know-how leave the organization.

Productivity is therefore no longer simply about equipment, production rates, or technology. It also depends on workforce stability, role clarity, cross-functional capabilities, and the effective integration of organizational knowledge into management practices.

The Real Challenge: Scattered Efforts, Insufficient Performance Management

The most revealing findings emerge in the areas of productivity and digital transformation. Many organizations have already introduced continuous improvement initiatives, performance indicators, new equipment investments, or more structured supervisory practices. The problem is not a lack of action. Rather, improvements remain uneven, fragmented, and insufficiently integrated to generate a meaningful breakthrough in performance.

This may be the report's most valuable message for business leaders: too many SMEs continue to multiply initiatives without regaining control of their performance management system. Projects accumulate, dashboards expand, and performance metrics proliferate—yet results remain fragile. The challenge is not doing more. It is choosing better, sequencing initiatives more effectively, and managing execution with greater discipline.

Measuring Is Not the Same as Managing

This distinction is critical. Many organizations already have data, dashboards, and reporting mechanisms. But do they have the right signals to detect problems early? Do their performance indicators actually trigger decisions? Are priorities clear enough to prevent valuable time, energy, and capital from being spread too thin?

In many cases, the problem is not a lack of information—it is the absence of a coherent management system that connects business priorities, meaningful metrics, management routines, and operational decisions.

The Barometer provides valuable insight. Companies that have implemented more productivity initiatives are also more likely to invest, develop succession plans, increase revenue and profitability, expand internationally, and respond more effectively to external disruptions. There is a clear distinction between organizations that continue to move forward and those that remain trapped in a costly, cautious middle ground.

Digital Transformation: An Accelerator, Not a Solution in Itself

The digital findings reinforce the same conclusion. Quebec's manufacturing sector recognizes the importance of digital transformation but continues to struggle with sustained execution. Many organizations have strengthened foundational capabilities—including business processes, IT infrastructure, and ERP systems—but adoption of more advanced technologies remains limited, and intentions too rarely translate into measurable business results.

Technology creates little value when it is layered onto a poorly managed operating system. Its impact grows significantly when it supports a clear performance management approach that improves visibility, decision-making, and operational execution.

The Challenge: Turning Effort into Results

Ultimately, the real challenge may no longer be convincing manufacturers that productivity matters—most already understand that. The more demanding question is how to help more organizations regain the clarity, focus, and management discipline needed to transform effort into lasting results.

Many businesses are not lacking ideas, commitment, or initiatives. They are lacking management capacity, alignment across improvement efforts, clearly defined priorities, and a robust management system that enables earlier decisions, faster escalation, and consistent execution.

Practical Ways to Improve Manufacturing Productivity

Conclusion

Quebec's manufacturing sector is facing more than a cyclical slowdown. It is navigating a convergence of structural challenges: insufficient productivity, compressed margins, commercial dependencies, incomplete digital transformation, succession pressures, and increasingly strained management systems. Yet this moment also represents a critical opportunity.

The next stage of competitiveness will not depend solely on increased investment or improved economic conditions. It will depend on the ability of more organizations to regain control of how performance is managed: clarifying priorities, selecting the right indicators, identifying issues earlier, reducing operational noise, better aligning strategy with execution, and maintaining disciplined follow-through.

The question is no longer whether productivity must improve.

The question has become: How can we help more business leaders move from recognizing the problem to taking concrete, sustainable control of organizational performance?

Sources

• STIQ, 17th Quebec Industrial Barometer (2026).
• STIQ Presentation – June 3, 2026 (Edgenda workshop on performance management).
• Background references consulted from STIQ and Edgenda resources identified through web research.

For more information Francis Poirier, Vice President, Consulting, francis.poirier@edgenda.com