The year 2020 was one of tragedy and triumph challenge and change for the Canadian construction industry.
The initial impact of COVID-19 had devastating effects, with the industry shedding a staggering 266,000 jobs, or close to one-fifth of its workforce. It saw a 43-per-cent reduction in hours worked between February and April as governments ordered the closure of projects and worksites across the country.
However, construction bounced back quickly and, as of December, was down only 7 per cent compared to a year earlier—a remarkable turnaround considering the uncertain times we live in.
Companies introduced safety protocols to keep the industry working, added sanitizing stations and staggered shifts so fewer workers were in contact with one another at pinch points.
Projections for 2021
So, what’s in store for 2021?
Some reports indicate a healthy rebound is in the cards while others maintain demand for construction will be more muted. Skeptics claim it will be some time before the industry gets back to full speed.
“The pace of recovery and further growth is likely to be mixed, both regionally and across market sectors,” states a report prepared by BuildForce Canada, which provides labour market information to employers.
The effects of COVID-19 are expected to result in a decline in commercial-sector investment due to heightened levels of uncertainty among cash-strapped private-sector firms. However, there is reason to believe that non-residential renovation work will do well as buildings will be redesigned and repurposed.
BuildForce researchers also expect major energy- and industrial-sector projects to continue, although some project schedules may be delayed. This may later result in a potential stacking of project demands.
On the residential side, BuildForce anticipates that demand for new-home construction and renovation work will increase as population growth strengthens and jobs return.
Recessionary Conditions May Exist
FMI Corporation is more bearish. The consultant indicates that recessionary conditions may exist for some time. It also anticipates a decline in single- and multi-family residential construction and manufacturing and power projects before modest growth kicks in later in 2021 through 2024.
Overall, FMI estimates that construction in Canada will amount to $266 billion in 2021, compared to $291 billion this year, predicting a nine-per-cent decline. The most severe declines are expected to occur in power at minus 17 per cent, amusement and recreation and multi-family residential at minus 11 per cent, and single-family residential, office, and manufacturing at minus 10 per cent.
A report on the state of the economic recovery by Osler, Hoskin & Harcourt notes that across the country, governments of the largest provinces have prioritized infrastructure investment to boost prospects, with a focus on shovel-worthy projects consistent with government objectives.
In addition, Saskatchewan, Manitoba, Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland and Labrador, and the territories have detailed capital and infrastructure plans as well as funding announcements and partnerships under federal programs scheduled well into 2021.
“As a result, there are significant investment and development opportunities in Canada for the private and public sectors,” the report concludes.
Reason for Optimism
Canadian Construction Association president Mary Van Buren noted in a year-end message that the industry found its strength in unity and collaboration in 2020 and is looking forward to 2021 with optimism.
“Our industry came together, sharpening our focus on health and safety, and championing the industry for the essential work and services we deliver.” While some sectors had to shut down or alter their services early on, construction largely continued unaffected, she noted.
As the federal government embarks on a strategy to accelerate economic recovery across Canada, Van Buren expects infrastructure investment to be part of the solution.
“The 2021 construction season will be off to a solid start with promised investments into public transit, energy-efficient retrofits, clean energy, rural broadband and water/irrigation infrastructure. And together, we will continue to push the federal government for balanced, co-ordinated and flexible infrastructure investment that is targeted to the real and immediate needs of provinces and municipalities, and not complicated by other federal policy goals. We must continue to work together to ensure these funds flow, and flow quickly.”
Entire Industry Rallied
Calgary Construction Association president William Black pointed out in a report that while it would have been easy to dwell on the negatives, the entire industry came together and prepared plans that allowed work to proceed.
“The power and ability of this industry when it rallies together is awe-inspiring,” he wrote. “Over my years in the industry, I have not always seen it at its best, but I can truly say that this year I was both intensely proud and humbled to be a part of such a collective achievement.”
Although work in construction slowed due to COVID-19, reports indicate the industry is still anticipating worker shortages in the coming years, with 257,000 workers expected to retire within nine years. BuildForce anticipates a shortfall of nearly 82,000 workers by 2029.
“To avert that shortfall the industry must continue to commit to broader recruitment, training, and apprenticeships—especially in key skilled trades—allowing it to meet future labour demands,” wrote BuildForce.