A survey of Canadian business leaders says they are optimistic about the future, with about three-quarters of the respondents expecting higher profits by 2015.
The survey is conducted every two years and was released by the Canadian Manufacturers and Exporters association.
It found a strong majority of the executives said their companies expect production volumes will increase without reducing employment or investment.
The survey of 649 business leaders found they expect more of their customer and supplier base will shift over the next three years to Eastern Europe, China and Brazil.
Nonetheless, they expect Canada and the United States will remain the primary markets for the foreseeable future.
More than half of the respondents have operations in Ontario and many have operations in more than one province.
Respondents in all provinces except Saskatchewan said the most pressing challenge facing Canadian companies is increased competition in their primary markets, followed by the strength of the Canadian dollar, attracting/retaining labour and global economic conditions.
Retaining labour was the key concern for Saskatchewan.
Small companies said developing new markets was key, while those with more than 500 employees identified supply chain management and logistics, cost and availability of raw materials and regulations as large challenges.