After experiencing a slight contraction in 2023, Canada’s construction sector is poised to grow over the next 10 years, a new report by BuildForce Canada suggests.

The organization released its 2024–2033 Construction and Maintenance Looking Forward national forecast last week.

The report finds that activity in the residential and non-residential sectors will chart different courses across the short term. The country’s residential sector, which peaked in 2021 under historically low interest-rate conditions, will contract again in 2024 before experiencing an upward trend between 2025 and 2029 and then stabilize toward the end of the forecast period. The initial period of growth is driven by a rebound in the new-housing component, which is followed in the later years by strong demand for renovation activity. These trends combine to increase employment to a peak of 6% above 2023 levels in 2028. Contractions in later years leave employment 2% above 2023 levels by 2033.

Activity in the non-residential sector is projected to remain strong across the forecast period, given the high volume of large projects planned and underway in most regions of the country. Engineering construction demands are projected to cycle lower in the short term before rebounding in middle years, in line with the schedule of planned transit projects in Ontario and British Columbia, as well as utility projects in New Brunswick, Nova Scotia, and British Columbia.

Meanwhile, investment in industrial, commercial, and institutional building projects is anticipated to see a steady upward curve through the decade. Demand is created by high levels of investment in the construction of institutional and government buildings, and by a rebound in commercial building construction as the economy returns to growth. Non-residential employment is projected to grow almost continuously across the forecast period, reaching a peak of 7% above 2023 levels by 2033.

Not factored into this report are public-sector initiatives to address housing affordability challenges, nor the anticipated increase in demand for construction services related to the retrofit of existing residential, industrial, commercial, and institutional buildings to accommodate the electrification of the economy.

“Construction is a key contributor to Canada’s gross domestic product, and an employer of approximately one out of every 13 working Canadians. Employment has increased by about 80% since 2002, and now counts about 1.5 million people,” said BuildForce Canada Chair Sean Strickland. “With further growth projected across the forecast period, the challenge before our sector is how to manage labour force pressures.”

Although labour market conditions eased in many provinces in 2023, pressures were alleviated most in the residential sector. Non-residential market conditions remained challenging in Prince Edward Island, Nova Scotia, Ontario, Quebec, Manitoba, and British Columbia.

“Market pressures may be easing in the residential sectors of many provinces in the short term, but even this relief may be short lived,” said Executive Director Bill Ferreira. “Our outlook calls for growth to return in the residential sector in 2025 and through the middle years of the forecast in many regions. Coupled with the strong outlook for non-residential construction, labour market challenges are likely to persist throughout much of the forecast period.”

By 2033, the industry’s overall hiring requirements are expected to reach 351,800 due to the retirement of approximately 263,400 workers, or 21% of the current labour force, and growth in worker demand of more than 88,000.

Part of that gap is expected to be filled by the hiring of some 266,300 first-time entrants aged 30 and younger. Even still, that leaves the sector short some 85,500 workers.

Clearly, an ongoing commitment to apprenticeship development in both compulsory and non-compulsory trades will be necessary to ensure there are sufficient numbers of qualified tradespeople to sustain a skilled labour force over the long term.

“The construction industry remains focused on building a more diverse and inclusive labour force,” said Strickland. “The industry has been working hard to enhance the recruitment of individuals from groups traditionally under-represented in the construction labour force, such as women, Indigenous People, and newcomers to Canada. Creating greater awareness of the tremendous career opportunities for these individuals within the construction sector will be critical to ensuring the sector is able to meet its future workforce needs.”

In 2023, there were approximately 210,800 women employed in Canada’s construction industry. Of them, 28% worked directly in on-site construction. However, as a share of the total 1.18 million tradespeople employed in the industry, women accounted for just 5% of the on-site construction workforce.

Meanwhile, in 2021, Indigenous People accounted for 5.1% of Canada’s construction labour force. That figure is notably higher than the share of Indigenous workers represented in the overall labour force (4.1%).

Finally, the sector may also leverage newcomers over the coming decade to meet anticipated labour market requirements. Based on current trends, Canada is expected to see elevated levels of immigration over the forecast period. This will make newcomers a key contributor to the industry’s labour force.

In 2022, newcomers comprised about 19% of the total construction labour force. That figure is notably lower than the 27% share newcomers make up of the overall labour force.