July 18, 2008

Construction Sector Council: Labour Market Forecast

Planning will help Ontario construction industry cope with looming labour shortage

VINCE VERSACE

staff writer

Steady growth in Ontario’s construction industry will require 74,000 new hires over the next eight years, says the Construction Sector Council’s recent Ontario labour market forecast.

“We will be able to cope with the demand and it all depends on how the projects are rolled out,” said Clive Thurston, president of the Ontario General Contractors Association.

“We want to see good planning and this also helps the public. The better the planning, the better the pricing and competition for projects.”

The CSC forecast concludes that, after a decade of steady growth and employment for many trades at or near record levels in 2007, Ontario is expected to maintain manageable growth.

In its current labour forecast for 2008 to 2016, the CSC states that as many as 17,600 new workers are required to keep pace with new projects, while another 56,300 workers are needed to replace retiring baby boomers.

“While there is some risk of an economic slowdown affecting Ontario, the level of growth for construction over the next eight years remains very positive,” said Ron Martin, executive director of the Sudbury Construction Association.

Economic growth in Ontario is expected to weaken to 1.3 per cent in 2008 after a relatively slow performance of two per cent in 2007.

“While this rate of growth may not suggest a technical recession for 2008, the province is certainly close to one,” forecasts the CSC.

“The major factors causing this situation include the recent rapid appreciation of the Canada-U.S. exchange rate, a weakening U.S. economy and higher oil prices.”

Employment growth will average 1.3 per cent over the forecast period in line with gross domestic product growth and productivity growth averaging about one per cent.

Engineering construction investment increased by 5.9 per cent in 2007 but will decline by 3.5 per cent in 2008 and 4.4 per cent in 2009. Growth will resume in 2010 at a pace of 1.1 per cent from 2012 to 2016, according to the Ontario forecast.

Increases in mining, manufacturing, transportation and warehousing investment, created by a recovering economy, will be responsible for an improvement in industrial building construction, stated the CSC.

Commercial building construction will grow by 2.3 per cent over the long term of the forecast.

Additional investment in health, education and infrastructure will be needed to accommodate a growing and aging population and this will drive institutional construction.

The CSC forecast noted the trades which have higher levels of replacement demand because of upcoming retirements.

Many trades now have an average age “well above” 40 in 2007 and their retirement demands will be heaviest later in the forecast period.

These trades are: boilermakers, construction managers, contractors and supervisors, crane operators, elevator constructors and mechanics, heavy equipment operators, industrial instrument technicians and mechanics, steam and pipefitters and truck drivers.

Filling in projected gaps is a top priority for the industry, said Patrick Dillon, business manager, Provincial Building and Construction Trades Council of Ontario.

“For Ontario’s construction industry, it will remain important to promote careers, attract youth and enhance training programs,” said Dillon.

“This support is needed both to deepen the ranks of skilled workers for new construction and to replace retiring workers.”

Thurston said the professional services and management gap is big right now and it is from the current and future apprenticeship and trades ranks that the industry will find its new project managers.

“There is no way to really speed up that process — it comes with experience and time,” added Thurston.

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