2022 Forecast Is Bright For Canada’s Construction Sector - Construction Labour Relations Association of BC

Labour & Economy

While economic recovery from the COVID-19 pandemic is underway in Canada, supply chain disruptions and labour shortages have added to challenges felt across most industries, and the construction sector is no exception.

The good news is that investments bounced back in the sector for residential and non-residential construction after a slowdown early into the pandemic.

According to the Canadian Construction Outlook: Q4 2021 report from global property consultancy company Jones Land LaSalle (JLL), the value of new building permits hit a peak of over $11 billion in the second quarter of 2021. The report states that the surge was a result of increased investment in the residential sector (all types of housing, due to low-interest rates and increased demand for space); the industrial sector (which had 36 million square feet of space under construction); and investment in new office buildings (largely projects started up in Toronto, Montreal, Vancouver and Ottawa, prior to the pandemic).

According to an update in GlobalData’s Q3 2021 report, Construction in Canada – Key Trends and Opportunities to 2025, Canada’s construction sector is expected to grow by 6.5% this year.

In 2022, there will be plenty of work available for the construction sector but some of the challenges from 2021 will carry over. One of those biggest challenges will be disruptions within building materials supply chains.

Throughout the pandemic, disruptions within the supply chain have led to building material shortages during a spike in global demand for materials such as lumber, steel, aluminum, copper and various plastics for construction building materials.

According to the JLL report, shipping containers coming across the Pacific Ocean have been taking an average of 73 days to get to their final destinations, opposed to 20 to 30 days pre-pandemic. In addition to delays, shipping costs have been, in many cases, 300to 400% higher than what they were before the pandemic.

JLL expects building material shortages and shipping costs should stabilize in 2022, resulting in more normal price variations.

The continued challenge of labour shortages within the construction industry will be another major hurdle in tackling the many residential and non-residential projects that are available and underway throughout 2022.

As stated in Deloitte’s 2022 Engineering and Construction Industry Outlook report, one of the factors compounding labour issues is a lack of qualified candidates, as the industry undergoes a technological shift and demand for data engineers, data scientists, coders and developers increase.

“The penetration of digital technologies requires workforce optimization both in terms of skills needed to perform the job and the knowledge of digital technologies such as digital twins, smart project management, and connected construction,” the Deloitte report says.

The HUB construction outlook cited BuildForce Canada data that said, “by 2030, the average Canadian construction worker will be 42 years old, and young people aren’t lining up to work in construction.”

“Over the next decade, firms need to recruit nearly 310,000 construction workers to replace those retiring and to meet demand; one report estimates the industry could be short 81,000 workers by 2030,” the outlook stated citing Canada Immigration News.