In their 16th annual Market Intelligence Report for Canada’s construction industry, infrastructure consultants BTY predict that Ontario will lead the country in growth in 2020, followed closely by British Columbia and Quebec.

The report projects growth rates of between 6 and 7 percent in Ontario, between 5 and 6 percent in British Columbia, and between 4 and 5 percent in Quebec. Growth is less certain in Alberta, Saskatchewan and Manitoba (1 to 2 percent each), and in the Atlantic Provinces (less than 1 percent).

Despite varied outlooks for construction output growth across the country, the report highlights a number of factors that are contributing to strong activity. Immigration, for example, is stronger than ever. More than 330,000 people come to Canada from abroad every year. The strong influx of people is creating further demand for new homes, schools, hospitals, and transportation, transit and water and wastewater infrastructure.

Increases in foreign direct investment are also boosting the national economy.

“FDI jumped from $32.2 billion in 2017 to $51.3 billion in 2018 even as global capital flows into developed countries declined by 40 percent,” says the report. “In fact, Canada ranks third in the world as a desirable place to invest in the 2019 A.T. Kearney Foreign Direct Investment Confidence Index.”

The report goes on to say that much of that foreign cash has gone into sectors such as manufacturing and technology, as opposed to energy and mining. As a result, greater demand is being created for new office space and e-commerce logistics facilities.

Finally, the report points to the potential of LNG Canada to kick-start energy industry expansion projects across the country. Already, 18 LNG export facilities are proposed. Thirteen of these are in British Columbia, two in Quebec and three in Nova Scotia. Overall says the report, “there are more than 400 projects currently under construction or planned in the resource sector, representing nearly $600 billion in actual and potential capital investment. Energy projects accounted for 87 per cent of the total value of major projects in that inventory in 2018.”

"What stands out to us is the industry's consistent ability to adapt to change and challenge," says BTY managing director Toby Mallinder. "With a record increase in foreign direct investment, sustained high immigration, a surging tech sector, expanding investment in renewable energy and a strong infrastructure pipeline, we see reason to be optimistic for construction in Canada even as trade uncertainty shadows the global economy."

Provincial outlooks

As a result of the LNG Canada development, which at $40 billion is the largest private-sector investment in Canada’s history, British Columbia is expected to see a sustained building boom. Its challenge will be finding workers to fill jobs in an already-strained labour market.

Ontario’s industry, meanwhile is being driven by a number of factors. Strong ICI construction activity, a resilient housing sector and major infrastructure projects are creating growth.

“Expanding e-commerce is driving demand for new logistics centres and Toronto office construction remains strong with several newly announced major developments, including a $3.5 billion mixed-use development near the CN Tower with two office towers, rental apartments and retail,” says the report.

As well, a robust pipeline of public-sector work, announced in the fall by Infrastructure Ontario, and population growth rates of just below 2 percent, will continue to drive demand for construction services.

Additional provincial outlooks from the report are as follows:

• Alberta will continue to see lower construction levels given oil patch challenges. However, strong population growth will sustain residential building, and investment in renewables will create new opportunities.

• Saskatchewan is also facing a year of low growth due to soft commodity prices and export roadblocks. One bright spot is steady population growth, expected to sustain demand in the residential sector.

• Manitoba will have major energy projects wrapping up and slower growth in residential and commercial construction. However, new projects in the energy sector and food processing will help keep activity levels stable.

• Quebec is projected to have a slight moderation in its robust activity levels. Strength in office and condos, industrial and warehousing, and infrastructure will remain mainstays.

• Atlantic provinces: Prince Edward Island will repeat as a growth leader, with Nova Scotia right behind. New Brunswick, and Newfoundland and Labrador will see low growth; all four provinces will have declines in the residential sectors.