Canada’s is a construction economy

(PHOTO: © MRTIMMI / ADOBE STOCK)

There’s an old adage often credited to Napoleon that says, “An army marches on its stomach.” With our December edition being our construction forecast edition, I’d like to twist that a bit and apply it to our current state to say that not only is a nation’s economy reliant on its infrastructure, but that Canada’s economy is reliant on its construction sector. Construction is feeding Canada’s stomach.

While the construction sector was just the fifth-highest contributor to Canada’s GDP in 2022, its influence is much more significant. Construction is an economic backbone – the base of the tower, that our many other sectors rely upon.

For example, other key GDP contributing segments, such as manufacturing and real estate, are reliant on the buildings and facilities built by the construction industry. From the water systems, hospitals, roads and schools necessary for a community to exist, to the plants, warehouses, transport infrastructure needed by our core industries, without the construction sector, we would be a nation in decline with nowhere to create products, and no structures by which to get products to markets, domestically or abroad.

As with any economy, there will be highs and lows, but spending on construction has been a way for the nation to grow out of a recession in the past, and seeing the number of major projects underway and at planning stages could have future historians comparing this period to the focus on infrastructure seen between the ’40s and the ’60s.

While it may be debateable whether we’ve already hit a recession, few would debate that there has been a slowing of economic growth, and this is expected to reach into 2024. But with the nation’s population continuing to expand, and government spending to build new transit systems, hospitals, schools, highways and homes, there will be cash flowing through the system even if the dreaded R-word hits in the coming months.

There has not been this level of focus on renewal and building at the government level in a long time, and while some additional details and fine tuning are absolutely needed, the flow of government funds will help this sector keep the Canadian economy pushing forward, recession or not. Construction feeds the economy, after all.

Until next time, stay safe and do good work.

Adam Freill

Editor

On-Site Magazine