Expansions are about problem-solving. Where will you find talent? How can you build flexibility and efficiency into manufacturing processes? Who can you work with to develop the next great application? How can you cut costs without reducing productivity?
Comparative data can help you answer several – if not all – of these questions. By comparing manufacturing cities across North America, you can identify which communities can help you find solutions and success.
In our Manufacturing Data Book, we’ve compiled key information for every manufacturing expansion strategy. You can compare eleven manufacturing hubs across North America on a variety of metrics, including workforce size, concentration of manufacturing workers, salaries, energy costs, business tax rates, presence of engineering students and more. The charts below are a subset of this data, with a focus on Waterloo and Detroit.
With its storied manufacturing legacy, Detroit is often a top choice for expansion. Detroit has this in common with Waterloo, whose manufacturing history stretches back 150 years. Detroit is only a three-hour car ride from the Waterloo region, linking the two areas along a robust automotive and manufacturing corridor.
Let’s compare Waterloo and Detroit, and determine which is best for your manufacturing expansion.
Key Takeaways
- Waterloo’s manufacturing workforce grew by 5% over the past five years, while Detroit’s declined by 3%
- Ontario’s energy grid is 84.3% emission-free and costs 6.15 cents per kWh, giving Waterloo-based manufacturers a cleaner, more affordable and more reliable energy advantage over Detroit
- Waterloo region offers a more cost-effective business environment that supports profitability and competitiveness
Data Point #1: Workforce Size & Growth
Detroit’s total manufacturing workforce is significantly larger than the Waterloo region’s. The area is home to approximately 4.4 million people, which naturally contributes to a wider manufacturing talent pool. Waterloo is a mid-sized hub with a population of just over 700,000.
Despite differences in population size, both regions have a similar concentration of manufacturing talent, with 14% of the population employed in manufacturing in Waterloo and 12% in Detroit. The mean concentration amongst the 11 cities profiled in the Manufacturing Data Book is 9.2%, positioning Waterloo and Detroit significantly above the average—and that’s the average of the best manufacturing hubs in North America.
Workforce growth tells another compelling story for the Waterloo community. Our manufacturing workforce grew by 5% over the past five years, while Detroit’s declined by 3%. A combination of factors contributed to our concentration and growth: an influx of skilled talent, a density of manufacturing-specific programs at our post-secondary institutions, immigration programs that encourage growth and the availability of government funding for hiring.
Also, unlike Detroit, we have one of North America’s biggest cities within an hour’s drive, expanding our manufacturing workforce to more than 358,768. Companies located here regularly draw upon the talent in the Toronto-Waterloo Corridor to strengthen their manufacturing teams and operations.
Data Point #2: Salaries for Key Occupations
Perhaps more than any other industry, manufacturing is the sum of its parts. And by parts, we mean more than the machinery. We’re talking about people. Successful manufacturing operations are complex and require skilled tradespeople, engineers, assembly workers, quality operators and more.
How much your people are paid factors into everything from your profitability to their quality of life. In the Waterloo region, due to a favourable exchange rate and a lower cost of living, salaries for key manufacturing roles are lower than in Detroit. Your employees retain an excellent quality of life, while your bottom line grows stronger.
This is just a snapshot of the salary information you can access in the Manufacturing Data Book—you can access salary data for machine operators and logistics managers, too. Want more? Contact the Waterloo EDC team for custom data to help inform your investment decision.
Data Point #3: Emission-free Energy Generation
Which community has the cleanest energy? This chart reflects the percentage of emission-free energy generation in the Waterloo and Detroit areas.
More than ever, clean energy matters for manufacturers. With more emission-free energy generation in your operations, your company can gain long-term cost savings and comply with global ESG standards, potentially avoiding costly carbon pricing. Using clean energy can also strengthen your brand reputation, at a time when consumers care about the environmental cost of doing business.
Plus, you only have to look as far as the recent rupture in the global fossil fuel market to understand how boosting dependence on clean energy enhances operational resilience.
At 84.3%, Ontario, the province where Waterloo is located, has one of the cleanest energy grids in North America. Detroit is on the lower end, forcing manufacturers located there to rely more heavily on fossil fuels.
Data Point #4: Energy Cost per kWh
Energy costs less in Waterloo Region than in Detroit, 6.15 cents vs. 8.51 cents per kilowatt hour (kWh). With tight margins and fierce competition to think about, energy costs are crucial to manufacturing operations. This data provides insight into how each city’s energy profile can affect your operational profitability, competitive positioning and long-term financial viability.
In addition to affordable energy costs, industrial companies located in Ontario can tap into several government subsidies, including the Renewable Cost Shift, which further reduces big-user electricity costs.
When you consider clean and cheap energy together, Waterloo is the place to be for competitive, profitable and sustainable operations.
Data Point #5: Corporate Tax Rate
If you’re considering an expansion, a location’s corporate tax rate can impact your decision. Even if a low corporate tax rate isn’t high up on your expansion wish list, it can still positively impact your profitability, competitiveness and ability to fund new technological investments.
The corporate tax rate is 2% higher in Detroit than in Waterloo. Lower corporate taxes—and lower business taxes in general—contribute to our cost-effective business environment.
Comparative data is an incredibly useful tool to evaluate potential expansion locations, but there are questions that numbers can’t quite answer. What is the ecosystem like? How stable is the economy? Does the community hold the same values as my company? Expansion problem-solving requires a qualitative and quantitative approach.
Waterloo EDC can support your expansion process as you evaluate which location is right for your manufacturing operations.