More than 80% of Ontario’s non-residential contractors say they’re feeling good about their prospects for business in 2023, despite rising interest rates, and ongoing recessionary talk.

The Ontario Construction Secretariat (OCS) revealed the findings of its annual Contractor Survey in March. The report captures the industry’s business outlook for the coming year, while monitoring critical issues affecting the industry. Some of the themes that have cut across recent editions of the report include temporary business closures, enhanced health and sanitation standards, and supply chain disruptions.

According to this year’s report, which surveyed 500 from across every region of the province, 81% of respondents think their business prospects for 2023 will either stay the same (49%) or improve (32%), while only 16% are forecasting a drop in business.

“The past few years have been uncertain and difficult, particularly in the construction sector with shutdowns, closures, supply chain disruptions and labour issues,” said OCS CEO Robert Bronk. “But the pipeline of work out there is staggering and generating strong demands for contractors and labour, thereby fueling contractors’ optimism about the coming year.”

Attitudes varied from region to region. In the Greater Toronto Area, for example, 32% said they anticipated more work, 47% expect the same, and 16% expect less. Numbers in the Southwest region were similar, with 32% of contractors believing there will be more work, 50% thinking there will be the same, and 18% expecting less work.

In Eastern Ontario, 30% expected more business, 56% expected the same, and 10% anticipated less. In Central Ontario, 27% of contractors expected more work, 52% expected the same, and 17% expected less. Finally, in Northern Ontario, 50% of contractors expected more work, 31% expected the same amount of work, and 19% expected less.

And where is the work coming from? Contractors expected a little more than half their work – 54% -- to come from the private sector. Nearly three-quarters (72%) said work would come from repeat customers, and 85% said they’d stay in their home regions to work.

The survey also asked contractors to rank their greatest worries for the year ahead. More than 40% reported the availability of experienced labour as their top concern. Other top concerns included material, labour and transportation costs, material availability, and increasing risk.

Fully a third of the contractors surveyed expect to be hiring this year, and two-thirds have raised wages in the past year to both retain and attract skilled labour.

Two key challenges remain in the post-COVID period. The first is supply chain disruptions. On that topic, fewer firms this year (73%) reported facing significant disruptions compared to last year (77%). Some of the approaches contractors have taken to resolve this problem included sourcing products from alternative suppliers, sourcing alternative materials, accelerating material purchases, and stockpiling materials.

The other post-COVID challenge is the delay or cancellation of projects. More than a third of contractors (36%) report that they have had a project cancelled in the past year, and more than half (53%) report projects that have been delayed.

Contractors cited escalating project costs as the number-one reason for a cancellation; difficulty sourcing materials was second.

“Despite the mostly positive outlook, the availability of experienced skilled labour and material related costs are still prominent concerns,” said Bronk. “However, the severity of these issues is somewhat less than in our 2022 survey, and certain aspects such as material availability and supply chain disruptions are showing improvement.”

The full survey is available on the OCS website.