With the COVID-19 pandemic receding, non-residential contractors across the province say they feel more optimistic about their prospects for the year ahead.

The Ontario Construction Secretariat’s (OCS’s) annual contractor survey, released last week, finds that 82 percent of those 500 general and trade contractors surveyed have a positive outlook on the province’s construction industry. A full 36 percent said they felt they would do more business this year than they did in 2021, while 48 percent said they thought activity would at least remain the same.

Only 11 percent said they expect their business to drop in 2022.

“As with most sectors of the economy, it has been a difficult time in construction over the past two years,” said OCS CEO Robert Bronk. “But we are starting to feel more confident that we are emerging from the pandemic, and we are seeing that reflected in the attitudes of Ontario ICI construction businesses.”

Regionally, confidence was highest in Central Ontario at 39 percent. The region has seen construction surge since the pandemic began, with many people choosing to leave the GTA in favour of more affordable costs of living elsewhere. Eastern Ontario contractors (38 percent) also reported high levels of confidence as Ottawa’s construction market, in particular, has never been stronger.

Greater Toronto Area builders scored right on the provincial average, while builders in the southwest (33 percent) and north (30 percent) were less confident of increased activity.

Many (55 percent) expect work to come mainly from new construction as opposed to maintenance work, with just over half of the anticipated volume coming from the private sector or sole-sourced projects. A majority of builders (85 percent) said they expected to work principally in their home regions.

Not surprisingly, contractors also expected their revenues to grow in 2022. Forty percent of respondents saw revenue rise in 2021 compared to 2020, with an average increase of two percent. More than half of respondents (52 percent) said they expected to earn more revenues still in 2022, with an expected average increase of 10 percent.

The survey also found that, on average, contractors expect the number of people they employ to grow by eight percent in 2022. A strong majority (94 percent) reported that they expect to hire more workers or stay at the same staff level as 2022. Some of the strategies they plan to deploy to attract and retain staff included increasing wages, promoting from within, and improving employee benefits.

However, despite the overall positive outlook, the industry won’t be without its share of challenges, the survey found. The cost and availability of labour and materials are major concerns for contractors.

On a seven-point scale — where seven represents a major concern and one no concern at all — 45 percent of contractors rated the availability of labour as a seven, and 44 percent gave material costs the highest rating. Also of significant concern is the quality of skilled trades labour (38 percent) and availability of materials (34 percent).

While COVID is less of a concern looking ahead, the pandemic continues to have an impact on the industry. More than half of contractors (52 percent) reported having projects postponed in the past year or later this year — however two-thirds of those have already been re-scheduled.

A further 38 percent have had projects cancelled outright. Some of the reasons for project cancellations include material cost, availabilities and delays, increases in general project costs, and a lack of funding from the project owner.

More than three-quarters (77 per cent) reported experiencing significant supply chain disruptions in the past year. Some of the mitigation strategies they used to overcome this challenge included sourcing alternative suppliers, accelerating material purchases after contract award, and specifying alternative materials in their contracts.

Survey respondents overwhelmingly report a positive outlook for the province’s construction industry in 2022. The OCS itself sees a list of projects valued at more than $140 billion in the province’s pipeline, and across all regions of the province.

Non-residential construction investment is projected to increase by 12 percent between 2021 and 2026, driven by provincial transit projects, as well as mining, utilities and wastewater projects.

Demand for ICI buildings, meanwhile, is expected to grow by 18 percent through 2026 on the strength of significant investment in healthcare and transit spin-offs.