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Construction activity in Canada has been growing during the past several years. The industry has been influenced by a positive economic environment such as low interest rates, low inflation rates, high disposable income, high commodity prices, strong employment levels and strong consumer confidence, among others. As a result, construction employment has been rising steadily since 1995, hitting a record high level of 1,019,500 jobs on average in 2005. This represents an increase of almost 68,000 workers or 7.1% with respect to 2004, making construction the leading industry in employment growth.
As analyzed in our latest Construction Looking Forward report, there are also big concerns about the age profile of the construction labour force. Baby-boomers are getting closer to retirement and there will be a need to replace the skilled labour force. In 2001, the average age of the construction workforce was approximately 41 years old. Some trades are already experiencing large retirement volumes and others are anticipating that this trend will lead to future shortages. This fast growing industry needs to train and attract more skilled workers to meet its future human resource needs. Employment Distribution by Province British Columbia and Alberta have experienced strong growth in construction employment during the past few years. Alberta’s construction employment has almost doubled since 1997, while British Columbia’s has increased by almost 30% in just 2 years (since 2003). The following figure shows the construction employment distribution by province. Ontario possesses the higher share of the national construction employment (39% of construction employment in Canada). British Columbia and Quebec have gained participation while the Atlantic Provinces are showing a smaller piece of the national construction employment pie. This does not mean an increase or decrease in employment in any of the provinces, but may be the result of a more accelerated growth in some provinces than in others. A brief description of provincial construction employment growth follows.
Provincial Trends and Highlights Sustained demand for housing has combined with record high commodity prices to create all time high levels of construction activity across Canada. Construction employment growth in recent years has exceeded all other industries. Training programs are expanding to meet employer needs. The pool of unemployed, qualified and experienced workers is at record low levels for several key trades and regions. Since construction employment responds to levels of construction investments, residential and non-residential investment expenditure patterns can provide an indication of the employment activity. British Columbia: Residential building investments have grown very rapidly over the past few years in line with stronger household growth, rising incomes, and lower interest rates. The fastest increase in expenditures has been that for new housing. In the non-residential sector, engineering construction has shown the most rapid growth over the past few years driven largely by increases in government investment. Alberta: Over the past few years, residential building investment expenditures have had an increasing trend, especially new housing expenditures, in line with higher in-migration and the increase in household formation. Since the late 1990s, industrial building construction expenditures have generally declined. After rising rapidly to 2001, engineering construction declined in 2002 in line with oil and gas investment, followed by a recovery to 2005. Institutional and government building construction has been growing faster than any other non-residential investment sector since 1995. Alberta Oil Sands industry may invest as much as $80 billion in the 2005-2015 period. Saskatchewan: Residential building investment expenditures have grown quite rapidly since 2001, in line with stronger household growth, rising incomes and lower interest rates. All categories of non-residential expenditures, except commercial building investment, have risen over the past few years, with engineering and industrial investment experiencing the fastest growth. The latter category has risen in the past couple of years, but is still well below its previous historic levels. Manitoba: Residential building investment expenditures have grown very rapidly over the past few years, in line with stronger household growth, rising incomes, and lower interest rates. The fastest increase in expenditures has been that for new housing. Institutional and government building construction is the only category of investment that has generally risen over the past few years. Industrial building construction has shown the most rapid decline. Declining agriculture and manufacturing industry investment are the two major sources of this decline. Ontario: Residential building investment expenditures have grown very rapidly over the past few years, in line with stronger household growth, rising incomes, and lower interest rates. The fastest increase in expenditures has been that for new housing. Institutional and government building construction has also shown rapid growth, whereas commercial and industrial building construction declined during the past years. Industrial building construction has shown a decline. Declining manufacturing industry investment is the major source of this decline. Investment in engineering construction has increased significantly (more than 50% in real terms) during the past 10 years Quebec: Residential building investment expenditures have grown very rapidly over the past few years in line with stronger household growth, rising incomes and lover interest rates. The fastest increase in expenditures has been that for new housing. Institutional and government building construction has shown the most rapid growth over the past few years. Commercial and industrial building construction has generally declined. The decline in industrial building construction has been a result of reductions in manufacturing investment expenditures. Newfoundland: Residential building investment expenditures have grown very rapidly over the past few years in line with stronger household growth, rising incomes and lower interest rates. The fastest increase in expenditures has been that for institutional and government building construction over the past few years. Commercial and industrial building construction has generally declined. The decline in industrial building construction has been a result of reductions in manufacturing investment expenditures. New Brunswick: Even though household formation has generally decreased, the very fast increase of new housing has resulted in the rapid growth of residential building investment expenditures during the past few years. Institutional and government building construction has shown the most rapid growth over the past few years. Commercial and industrial building construction has generally declined. The decline in industrial building construction has been a result of reductions in manufacturing investment expenditures. Nova Scotia: Even though household formation has generally decreased, the very fast increase of new housing has resulted in the rapid growth of residential building investment expenditures during the past few years. Engineering construction, government and institutional building construction have shown the most rapid growth over the past few years, driven largely by increases in government investment. Industrial building construction has declined sharply, while commercial building construction has declined at a slower rate. The decline in industrial building construction has been a result of reductions in manufacturing investment expenditures. Prince Edward Island: Even though household formation has generally decreased, the very fast increase of new housing has resulted in the rapid growth of residential building investment expenditures during the past few years. Government and institutional building construction has shown the most rapid increase over the past few years, cycling down in the past 2 years. Industrial and commercial building construction expenditures have registered noticeable declines, while engineering investment has grown slowly. The decline in industrial building construction has been a result of reductions in manufacturing investment expenditures. Construction Employment History by Province The employment trend patterns vary from one province to the next. In 2005, most of the provinces recorded an increase in annual construction employment (except for Nova Scotia New Brunswick and Alberta). In particular, British Columbia reported an impressive increase of 16.6% during 2005 (168,017 on average, compared to 144,050 in 2004). Ontario, Quebec and Saskatchewan grew over 7% and have generally followed an increasing trend. Even though Alberta recorded a small decrease of 0.6%, the construction employment in the province has had a very steady growth over the last decade. After a recession in the late 90s and beginning of this decade, Manitoba’s construction employment has trended up by growing 9% since 2002. Other provinces have experienced more employment fluctuations over the past 11 years.
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