Ontario Construction News staff writer
FMI Corporation, a North Carolina-based construction industry consultancy and investment banker, believes the industry in both the US and Canada will experience recessionary conditions for the remainder of 2020 and possibly into 2021.
In its Second Quarter 2020 report, FMI projects a stable market (zero to 4 per cent growth) for health care, education, highway and street, sewage and waste disposal, water supply and conservation and development.
However the consultancy predicts there will be a decline in business for single and multi-family residential construction, improvements, lodging, office, commercial, religious, public safety, amusement and recreation, transportation, communication, manufacturing and power projects.
Overall, FMI anticipates the total “construction put in place” estimated for Canada will be $266,130 million in 2020 compared to $291,880 this year, a nine per cent decline.
The most severe declines will occur in power (-17%), amusement adn recreation and multifamily residential (-11%), and single family residential, office, and manufacturing (-10%).
FMI predicts some the Canadian recession will continue into 2021, with an overall 2 per cent decline for the year, before things recover with modest growth in 2012 through 2024.
“Recent economic disruptions considered in the following forecast include the domestic and foreign impact of COVID-19, recognition of a recession beginning in March 2020, high volatility across financial and equity markets, emergency policies set in place by the Federal Reserve, some early government stimulus, significantly lower oil pries, mounting political uncertainty, and social unrest heading into the 2020 presidential election,” FMI says in its report, which covers both the US and Canadian economies.
“Based on the speed, breadth and apparent lasting impacts of these various factors, FMI is anticipating the current recession to continue through the remainder of 2020 and possibly into 2021. Depth and reach of these disruptions will remain under close watch.