Canada’s construction industry rebounds post-pandemic, with more ‘muted’ growth expected

©CAN STOCK PHOTO/ZEPHYR18
©CAN STOCK PHOTO/ZEPHYR18

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Ontario Construction News staff writer

Construction requirements across Canada are expected to rebound in 2021 in the wake of the COVID-19 pandemic and rise through the coming decade – albeit at more muted levels than in the past 10 years.

According to the latest labour market forecast released by BuildForce Canada, the strength and pace of recovery will vary among provinces, and depend on the rollout of COVID-19 vaccines, the recovery in consumer and business confidence, global demand for Canadian exports, and the lifting of restrictions on international travel.

BuildForce Canada’s 2021–2030 Construction and Maintenance Looking Forward national report forecasts construction employment to rise by 64,900 workers over the next decade – an increase of 6 per cent over 2020 workforce levels.

In addition to the growth, BuildForce says by the end of the decade, the industry will need to replace about 259,100 workers, or about 22 per cent of the current labour force, due to retirement.

“Canada’s construction outlook is strong for 2021 and well into the middle portion of the decade thanks to gains in the residential and non-residential sectors,” said Bill Ferreira,  BuildForce Canada’s executive director. “And while we forecast growth to slow over the later years of our forecast period, we nonetheless expect that the industry will be challenged to recruit more than 309,000 new workers to replace retirees and keep pace with demand.”

buildforce national summary 2021

BuildForce Canada anticipates the non-residential sector will lead industry growth between 2021 and 2023, driven by a large list of public transit, health care, education, roadwork, and other civil infrastructure projects. Overall, non-residential employment is projected to increase by more than 39,800 workers between 2021 and 2025, and another 5,000 by 2030. The sector is expected to end the decade up 44,800 workers compared to 2020.

After a mixed year in 2020, the residential sector is expected to see strong growth post-2021. Low lending rates and renewed immigration levels are expected to drive a moderate up-cycle in new-home construction to 2024, while renovation work is projected to grow steadily. As a result, total residential employment is expected to peak in 2024 before ending the decade with an increase of nearly 20,100 workers (+4 per cent) compared to 2020 levels.

Ontario will be driven by a growing pipeline of major infrastructure projects across all regions. An additional recovery in commercial and industrial investment will bring labour demands to a peak in 2026.

Replacing retiring workers typically requires several years of pre-planning to avoid the creation of skills gaps. By 2030, overall hiring requirements in the industry are expected to exceed 309,000 due to the retirement of some 259,100 workers (or 22% of the current labour force) and growth in worker demand of 49,900.

Based on historical trends, Canada’s construction industry is expected to draw an estimated 228,100 first-time new entrants aged 30 and younger from the local population, leaving the industry with a possible retirement-recruitment gap of 31,000 workers. When coupled with demand growth, the industry may be short as many as 81,000 workers by 2030.

Clearly, an ongoing commitment to training and apprenticeship development will be necessary to ensure there are sufficient numbers of qualified tradespeople to sustain a skilled labour force over the long term. What is yet unclear is how the pandemic will impact registration rates going forward. Limited data collected to date suggests that the pandemic has resulted in a steep decline in new registrations relative to employment across the country. It has also imposed significant obstacles to the in-person delivery of training, testing, and certification, which may impact near-term completion rates.

Building a sustainable and diverse labour force will require the construction and maintenance industry to increase recruitment from groups traditionally underrepresented in the current construction labour force, including women, Indigenous people, and new Canadians.

In 2020, there were approximately 190,000 women employed in Canada’s construction industry, of which 27% worked directly on construction projects. Of the nearly 1.1 million tradespeople employed in the industry, women made up 5%. Increasing the participation of women in the construction labour force, particularly in the skilled trades, would go a long way to addressing the industry’s longer-term recruitment needs.

The Indigenous population also presents recruitment opportunities for Canada’s construction industry. In 2020, approximately 5% of the country’s construction labour force was made up of Indigenous people – compared with about 4% of its overall working-age population. Of those in the construction and maintenance industry, 81% work directly on construction projects. Given the predisposition of Indigenous workers to consider careers in construction, there may be scope to further increase the recruitment of Indigenous people into the industry.

The construction industry may also leverage new Canadians over the coming decade to meet anticipated labour market requirements. Canada is expected to welcome an average of more than 320,000 new international migrants each year between 2021 and 2030. This will make new Canadians a growing segment of the overall labour force.

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