Linesight Report: Labour shortage key factor for Canadian construction
By Adam FreillConstruction Labour
A lack of skilled workers and weakness in residential sector are making growth difficult for the Canadian construction industry, says consultancy.
The construction industry is expected to contract by 0.9 per cent in 2023 due to reduced residential output, elevated construction costs, and a shortage of skilled labour, says global construction consultant Linesight in its Canada Country Insight and Commodity Report for Q1 2023.
The report predicts moderate economic growth in Canada and a return to normal commodity escalation as supply chain pressures continue to ease, but several challenges remain within the broader construction sector.
“The reduction in inflation rates is positive for the industry and the outlook is improving with lower energy costs, improved supply chain conditions and significant growth in infrastructure and mission critical investments,” stated Patrick Ryan, executive vice-president for the Americas at Linesight. “However, the ongoing lack of skilled workers in Canada continues to pose a risk for the construction industry.”
Canada’s industrial construction sector is expected to remain robust, with a forecasted growth of 14.9 per cent in 2023, supported by increased investment and permits for industrial construction, as well as the government’s efforts to establish Canada as an industrial hub. The life sciences sector is also expected to grow due to investor interest and government policy support.
A decrease in demand from the residential sector has put lumber prices into a continued drop in recent months from the highs reached in the first half of last year, while higher energy costs have been a key factor in the recent upward trend in cement and aggregates prices. Increased environmental regulations on production will contribute to further upward pressure on prices in the coming quarters, say the report authors.
“Residential construction continues to slow,” said Ryan, “but government investment in key sectors such as industrial will help boost the industry as a whole provided there is some easing of the current skilled labour shortages which is curtailing the growth opportunities.”
To access the full report, please click here.