The latest RICS Canada Construction Survey, conducted quarterly, found that growth in infrastructure and public non-housing construction is offsetting weaknesses in other areas, including: energy, private industrial and commercial, and public housing.
“The downturn in the energy sector means some companies’ ability to spend on the private sector projects is less than previous years, plus the overall economy cooling means less spending on private construction projects,” commented Jeff Logan MRICS, Senior Estimator at Canadian Turner Construction, Toronto. “However, government spending and projects are supplementing the slowing of private sector construction work.”
According the survey, 35 per cent of respondents reported a rise in their public non-housing workloads in Q3—meaning that 35 per cent more reported an increase than a decrease, while 31 per cent reported an increase in their infrastructure workloads. Meanwhile, the energy, oil and gas sector saw a drop in activity for the eighth consecutive quarter, with a net balance of 33 per cent reporting a decrease. 28 per cent, 18 per cent and 6 per cent, respectively, reported drops in public housing, private industrial and private commercial workloads.
As to whether the policies of the Trudeau government are boosting infrastructure projects, Logan said, “I wouldn’t say they’re necessarily increasing them. Infrastructure spending is already a big topic in Toronto, and transportation – both rail and highway — plus typical underground utility work, need a great deal of improvement. Much of our infrastructure is quite old and there’s a great deal of congestion, with one of the longest commute times in the world.”
There’s been talk in the GTA for a number of years on how to deal with this congestion and about the “extensive investments” needed for public transit. In addition, P3 (public-private partnership) projects are continuing to move the market in the GTA, and will hopefully help provide a solution to this severe congestion.
The survey also found planning and regulatory issues to be the most significant obstacle to growth in Q3, with nearly three-quarters (72 per cent) of respondents reporting that as a concern. Financial constraints, competition from rivals, insufficient demand, and shortages of skilled labour (especially of quantity surveyors) comprised the other major impediments reported by survey participants.