A look ahead for Canada’s construction labour force requirements

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Buildforce

BuildForce Canada forecasts a need to attract more young people, and increased mobility and immigration

Special to Canadian Design and Construction Report

Canada’s construction industry will need to attract more young people and workers willing to move from other provinces, regions and countries, to meet its changing labour force needs, according to a new labour market forecast released recently by BuildForce Canada.

“As major projects gear up and wind down, building a new and mobile workforce is an industry priority,” said BuildForce Canada executive director Rosemary Sparks. “This will help fill the skills gap, as up to one-quarter of the construction workforce retires over the next decade.”

The organization’s 20142023 Construction and Maintenance Looking Forward forecast shows strong labour demands continue in the West as some markets slow in the East. As a result, more workers from other provinces and countries are needed, especially during peak periods.

Mobility is key to meeting industry needs over the next five years, with specialized skills and experience in short supply in some regions. As many as 300,000 new workers will be needed to replace retirees and meet project demands over the next 10 years. These demands differ across each province and trade.

BuildForce Canada’s annual forecast also highlights three distinct labour cycles across the following regions and sectors:

  • Resource projects in Newfoundland and Labrador and Northern Ontario drive a surge in labour needs to 2014 or 2015. Oil sands developments, sustaining capital and maintenance work in Alberta, rise to new peak demands by 2019. Major new resource and infrastructure projects in Northern B.C. drive construction employment to an all-time high in 2017.
  • New mining and infrastructure projects, including transit expansion, and refurbishment of nuclear power facilities in Ontario, will drive job growth over the next decade.
  • While expansion slows in Saskatchewan, labour demands stay well above historical levels.

There will be recovery and expansion in Manitoba and sustained levels of employment in Quebec, New Brunswick, Nova Scotia and Prince Edward Island.

            BuildForce says non-residential construction will lead job growth, with a series of major resource and utility/infrastructure projects providing cyclical workforce demands in many provinces and more moderate but steady growth in commercial and industrial sectors.

            However, residential construction is expected to slow as several provincial housing markets experience a brief downturn in 2013 before moderate recovery to 2015 and 2016. Residential employment remains below the 2007 peak until 2023 in some provinces. Ontario, Alberta and British Columbia are moderately stronger, with a small gain in residential job growth from 2014 to 2023. A shift in the residential market is driven by slower population growth and new housing starts declining to come back in line with household formations. Renovation construction continues to grow, partially offsetting the decline in new construction.

“Meeting the demand for skilled labour takes long-range planning and investment,” Sparks said. “The focus in every region should be on a collective effort to draw youth, women, Aboriginal people and newcomers to construction careers and build the ranks of future specialists, foremen and supervisors.”

Below are regional reports. These are covered in greater detail at www.constructionforecasts.ca.

B.C. construction employment expected to reach unprecedented high

B.C.’s construction industry will need to ramp up recruitment efforts to keep pace with planned projects and the retirement of more than 34,000 workers over the next decade

BuildForce Canada’s report shows major resource and infrastructure projects in the North help drive construction employment to an all-time high in 2017.

“Recruitment efforts will need to focus on attracting workers from outside the province to bolster the local skilled workforce,” says Rosemary Sparks. “This may mean competing for skilled labour with resource projects in other provinces.”

BuildForce Canada’s forecast also shows:

  • Non-residential construction dominates job creation over the next decade. Employment growth accelerates each year to 2017, as major LNG projects and related pipeline work are expected to begin, along with a series of mining, electricity generation and transmission projects.
  • A brief surge in new housing in 2016 and 2017 coincides with the peak in non-residential projects and adds to potential labour market challenges. Through the rest of the scenario period, a gradual increase in housing stock results in steady gains in renovation and new housing construction jobs.

“About 24 per cent of the province’s skilled workforce is retiring over the next 10 years,” Sparks said. “This creates unique challenges, given that retiring tradespeople in both housing and non-residential construction will be taking years of experience and specialized skills out of the labour force.”

Alberta leads Canada through next wave of construction

Alberta continues to lead Canada’s construction industry through the next decade, with major new oil sands projects and residential work driving job growth in virtually every year between now and 2023, according to BuildForce Canada.

The 2014–2023 Construction and Maintenance Looking Forward forecast shows the pace of expansion has resumed, with construction employment across all markets growing past the 2008 peak by 2013.

Major resource and engineering projects lead non-residential job growth in every year over the next decade. The start-up of new major oil sands projects this year and hiring related to flood damage repair, boost hiring in 2014.

“While Alberta’s construction industry has adapted well to conditions to date, there may be recruiting challenges,” BuildForce’s Rosemary Sparks says. “There’s stiff competition for skilled labour in other provinces, and meeting local needs won’t be easy. As retirements rise, we are also facing the potential loss of thousands of skilled and experienced workers.”

Alberta will need to replace as many as 37,500 workers, as up to 22 per cent of its workforce retires over the next decade.

BuildForce Canada’s forecast also shows that Alberta leads the demand for skilled and specialized labour in major projects across Canada:

  • ·         The oil sands industry matures and capacity grows larger, shifting employment from new capital projects to increased ongoing maintenance work and sustaining capital projects over the long term.
  • ·         Industrial, transportation, electricity generation and transmission and pipeline work add to labour demands. As many known projects wind down, a brief pause in 2015 is followed by moderate employment growth from 2016 to 2023. Most of the current scheduled projects add jobs from 2015 to 2019.
  • ·         Commercial and institutional activity grows slowly from 2016 to 2019 and then provides a steady increase in jobs from 2020 to 2023.
  • Residential construction spending and employment will exceed the 2007 peak, with a rise in renovations and repairs. Improving conditions resulted in strong housing starts in 2012 and 2013. Activity will plateau this year, then move up and down in mild cycles to 2023.

Alberta pioneered the practice of bringing in workers from outside the province and country. Alberta’s non-resident workforce is rising as its labour force expands to meet project demands.

“Alberta’s skilled labour requirements far exceed those of other provinces, and that makes building a strong, permanent workforce a must,” Sparks said. “There’s a real need to continue promoting skilled trades careers as well as ensuring training and retention programs are sufficient to support the next generation of workers.”

Saskatchewan’s construction industry prepares for workforce shift

Skilled labour requirements over the coming decade are changing, requiring many of the workers recruited over the last several years to stay on for major new projects, according to BuildForce Canada.

The forecast shows construction activity and employment growth slows, but stays well above historical levels. Major resource projects that drove construction employment to a record high in 2013 come to completion, signalling some shift in the labour force away from big projects and housing. A large segment of the workforce will be employed in commercial and institutional building, where there is steady growth.

“Although the focus for the construction industry is shifting, the goal is the same,” Sparks said. “Building a strong, permanent workforce requires long-range planning to promote skilled trades to young people and to encourage out-of-province workers to stay.”

BuildForce Canada’s forecast also shows:

  • Residential has been one of the fastest growing markets in Canada over the last few years, with a peak in residential construction in 2013. The housing labour force will shift to renovation work, partially offsetting slower new housing activity. The workforce remains well above historical levels at the end of the scenario period.
  • Non-residential construction employment has increased by 50 per cent since 2007. While major activity is expected to slow, with fewer opportunities in engineering construction, this is partially offset by steady but moderate growth in industrial, commercial and institutional construction. This keeps employment well above historical levels.
  • Just under 7,000 workers are expected to retire over the next decade, with retirements spread across all construction trades and occupations.

“This means 19 per cent of the workforce will need to be replaced,” Sparks said.

Major new projects to drive Manitoba’s construction job growth

Hydro projects planned in Manitoba’s North will jump-start construction job growth and demand for specialized trades, with a pattern of steady growth in residential and non-residential construction over the next 10 years, BuildForce Canada says.

A pause in job growth this year and next eases recruitment challenges, with one noted exception. A new round of scheduled hydro projects in the North adds to construction employment growth over the next decade. Hiring will peak for a large number of specialized trades in 2016, and in 2020 and 2022.

“A select group of skilled trades will be in high demand for major hydro projects,” Sparks said. “Industry will need to keep its focus on skills training, recruitment and mobility to meet project requirements.”

BuildForce Canada’s forecast also shows:

  • Road, highway and bridge construction declines marginally between now and 2015, but is expected to remain above historical activity levels for the remainder of the scenario period.
  • Housing activity is now levelling off. New housing starts and renovation work results in moderate growth and job opportunities in residential construction.
  • As many as 7,300 skilled workers, or approximately 21 per cent of the workforce, will retire over the next decade, with this number only partially offset by young workers starting their careers.
  • “Replacing the skills and experience of thousands of retiring workers takes major planning,” Sparks said. “The key is convincing workers to come back to this province and encouraging far more young people to sign up for skilled trades careers.”

 

Construction job growth forecast across most Ontario regions

            Large resource and infrastructure projects drive regional growth

Major projects will drive construction job growth in Ontario and turn up the pressure to replace as much as 25 per cent of the province’s skilled workforce retiring over the next decade,  BuildForce Canada forecasts. Some of Canada’s largest infrastructure projects will drive growth in construction employment over the next 10 years. Forecast highlights include the following:

  • ·         A series of large resource and infrastructure projects create waves of employment in engineering construction, with increased demand in Northern Ontario over the near term to 2017 and steady growth in the Greater Toronto Area (GTA) to 2019.
  • ·         Commercial activity also rises in all regions, adding jobs.
  • ·         Industrial work recovers, slowly restoring employment levels. Growth in industrial and commercial sectors is strongest in the GTA.
  • ·         Institutional and road, highway and bridge work decline over the near term, but rise modestly over the medium term.
  • ·         Housing construction recovers from a 2013 low point, with recovery reaching new peaks between 2015 and 2017 in the GTA, and Northern and Central Ontario, creating the potential for temporary, cyclical labour shortages.
  • Retirements result in the need to replace as many as 83,000 skilled workers over the next decade.

“Rising retirements, and major projects are two forces driving the industry,” says Sparks.

Here are BuildForce Canada’s regional Ontario forecasts:

Northern Ontario

  • The workforce changes dramatically over the next decade, with mining and infrastructure projects, including the Ring of Fire, the Energy East pipeline project and ongoing hydroelectric and transmission work, bringing in a wave of new, often non-resident workers. The non-residential workforce increases by 40 per cent between 2012 and 2017.
  • Housing and commercial building also increases in response, with project demand exceeding the local workforce.
  • ·         Retirements will be higher in this region, given its older workforce. Recruitment efforts may focus on youth and the Aboriginal community.

Southwest Ontario

  • Recovery is anticipated in this region this year. Major project activity and a revival in housing help to fuel more jobs and the arrival of construction trades between now and 2017.
  • ·         Increased non-residential construction, including highway, bridge and utility work in 2014, peaks employment in 2017, creating potential recruiting challenges for some trades.

GTA

  • There will be consistent recruiting challenges in this region. Non-residential building is expected to grow steadily, with the GTA planning some of the largest infrastructure projects in Canada. Key projects, including the “Big Move” and the refurbishment of a nuclear facility, are planned to start, with activity peaking in 2019. This leaves the GTA with rising labour requirements.
  • ·         After reaching a low point in 2013, residential employment starts a stronger rising trend, peaking in 2019 and then staying at levels close to 2012.

Central Ontario

  • There will be steady growth in most sectors, with a sharp improvement in residential construction in 2015. This increases demand for selected trades and occupations.
  • ·         Non-residential construction is on a moderate upward trend, with steady growth in industrial, commercial and institutional construction. Engineering construction follows a mild cycle as major projects start up and then wind down.

Eastern Ontario

  • Construction employment remains relatively unchanged over the next decade. Institutional, road, bridge and other government spending will slow.
  • Slower growth translates into a moderate decline in residential employment.

Quebec: Construction turns down after 15 years of expansion

Construction employment in Quebec passed through a record high peak in 2012 and has started a slow decline that will reduce activity to 2015. BuildForce Canada reports. “After a 15-year expansion that added jobs to every sector and in all regions of the province, construction has finally turned down. Weakness is most apparent in industrial and engineering work – the markets that led the boom – and in residential work. A long list of major projects has passed peak activity and the projects are approaching completion.”

“By historical standards this is not a major construction cycle, but rather a pause or modest slowdown at the top of a remarkable boom. Momentum has slowly ebbed as fewer major projects are planned and demographic conditions will limit housing requirements over the coming decade. The first year of declining employment since 2009 was 2013.”

Weakness in 2013 was spread across most construction markets. The market shift in Quebec is similar to the changing activity in Ontario and Atlantic Canada, BuildForce Canada says. “The need to address deficits and weaker global economics has slowed resource investments and the housing boom that had fuelled the construction recovery since 2009. Government restraint and investor caution has slowed the announcements of the next round of public projects. Quebec also has an aging construction workforce that will prompt a steady rise in retirements. At the same time, the population under 30 years old is declining, leaving the construction industry to compete with other industries for the new entrants who will learn the trades and carry on the traditions.”

Quebec residential labour requirements decline

Residential activity, driven by a decline in new housing, was the first sector to turn down. Following a brief decline in 2009, housing starts were up in 2010, but then declined again between 2011 and 2013.  Across the 2014–2023 scenario, new housing cycles up to 2016 and then declines for the remainder of the period to 2023 in line with household formation.

Non-residential construction – limited recovery starts in 2016

While overall non-residential employment is on a declining trend that will carry activity lower until 2015, a limited recovery starts in 2016. This is a mild cycle with fluctuations that sustain employment close to, and then slightly above, 2013 levels.

Employment in commercial work rises, providing stability and offsetting wider fluctuations in institutional, engineering, infrastructure and industrial work. In the short term, institutional markets are held back by the completion of the large hospital projects, but these employment losses are partly balanced by new health, education and prison projects.

The current slowdown is also concentrated in electricity-related work, as the major hydro projects and related transmission lines that are underway have already passed through peak levels of activity. Very large electricity projects are planned for the coming years, but these investments are smaller than the larger projects now approaching completion. Lower investments in renewable energy systems, and wind farms in particular, are another contributor to the electricity downturn.

Infrastructure activity slowed in 2013, but is expected to turn around after 2014 as the economy improves. Resource developments – especially under the government’s Le Plan Nord to develop natural resources, including energy, mining and forestry projects – will slow as part of fiscal restraint. Industrial building has been on the rebound since the 2009 recession and rose to a record high level in 2012, led by mining projects, but activity slows over the near term to 2016, followed by moderate growth to the end of the scenario period

in 2023.

Non-residential employment rises by six per cent across the scenario period.

            See Atlantic Canada reports in Atlantic Construction News, page XXX.

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