Construction in Canada - Key Trends and Opportunities to 2023

Date: May 10, 2019
Pages: 51
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Publisher: GlobalData
Report type: Strategic Report
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ID: C6538A5EB24EN
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Construction in Canada - Key Trends and Opportunities to 2023
Construction in Canada - Key Trends and Opportunities to 2023

SUMMARY

The Canadian construction industry registered minimal growth in 2018, with output expanding by 0.6% in real terms - down from 4.3% in 2017. The sharp deceleration in activity was mainly driven by significant declines in residential construction, as well as repair, engineering and other construction activities. Overall, the industry posted negative growth during the review period (2014-2018), registering a compound annual growth rate (CAGR) of -0.29% in real terms. Low commodity prices, weak household spending and a decline in manufacturing investment hindered growth during the review period.

Over the forecast period (2019-2023), Canadian construction activity is expected to be supported by the government’s planned investments in infrastructure. Under the Investing in Canada Plan, the government plans to invest a total of CAD180 billion (US$139 billion) in key infrastructure sectors through 2028. The industry’s output is also expected to be supported by improvements in business confidence over the forecast period, which will drive investment in overall infrastructure. In addition, the government’s aim to improve local energy resources is expected to support investment in energy infrastructure projects, which will in turn fuel growth in the industry.

In real terms, the industry’s output value is expected to post a forecast-period CAGR of 0.90%.

GlobalData’s 'Construction in Canada - Key Trends and Opportunities to 2023', report provides detailed market analysis, information and insights into the Canadian construction industry, including -
  • The Canadian construction industry's growth prospects by market, project type and construction activity
  • Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Canadian construction industry
  • Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Key Highlights
  • GlobalData expects the residential construction market to register a forecast-period CAGR of 4.33% in nominal terms, driven by government’s efforts to build affordable houses. In the 2019 budget, the Canada Mortgage and Housing Corporation (CMHC) announced plans to spend CAD1.3 billion (US$943.0 million) to provide financial help to first-time home buyers during 2019-2022.
  • Industrial construction market’s forecast-period growth will be driven by government’s focus on the production of steel, aluminum and other manufacturing sectors with an aim to increase exports. In March 2019, the government announced a plan to invest CAD100.0 million (US$77.9 million) to support small and medium steel and aluminum manufacturers across the country.
  • GlobalData expects the infrastructure construction market to register a forecast-period CAGR of 3.63% in nominal terms, driven by the government’s plan to develop the country’s transport infrastructure under the Transportation 2030 program. To modernize the country’s road, rail, airport and sea port infrastructure with an aim to increase trade activity and provide efficient transport system to citizens, the government plans to spend CAD233.1 billion (US$180.0 billion) by 2029-2030.
  • Forecast-period growth in the institutional construction market will be driven by the government’s focus on the healthcare and education sectors. In the 2019 budget, under the Canada Health Transfer program, the government allocated CAD40.4 billion (US$31.1 billion) in Financial Year (FY) 2019-2020 - an increase of 4.7% compared to spending in FY2018-2019. Through the Canada Health Transfer program, the government allocated funds for the development of healthcare systems. In April 2019, the Ontario government announced plans to allocate CAD27.0 billion (US$21.0 billion) towards the healthcare sector over the next ten years.
  • The total construction project pipeline in Canada - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at CAD1.4 trillion (US$1.1 trillion). The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards late-stage projects, with 54.5% of the pipeline value being in projects in the pre-execution and execution stages as of May 2019.
SCOPE
  • This report provides a comprehensive analysis of the construction industry in Canada.
  • Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Canada, featuring details of key growth drivers.
  • Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
  • Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
  • Listings of major projects, in addition to details of leading contractors and consultants.
REASONS TO BUY
  • Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
  • Assess market growth potential at a micro-level with over 600 time-series data forecasts.
  • Understand the latest industry and market trends.
  • Formulate and validate strategy using GlobalData's critical and actionable insight.
  • Assess business risks, including cost, regulatory and competitive pressures.
  • Evaluate competitive risk and success factors.


NOTE: Out of security concerns GlobalData requires using corporate email address.
1. EXECUTIVE SUMMARY

2. CONSTRUCTION OUTLOOK: AT-A-GLANCE

3. LATEST NEWS AND INDICATORS

4. KEY DRIVERS AND RISKS

4.1. Economic Performance
4.2. Political Environment
4.3. Demographics
4.4. Risk Profile

5. CONSTRUCTION OUTLOOK

5.1. All Construction
  5.1.1. Outlook
  5.1.2. Project analytics
5.2. Commercial Construction
  5.2.1. Outlook
  5.2.2. Project analytics
5.3. Industrial Construction
  5.3.1. Outlook
  5.3.2. Project analytics
5.4. Infrastructure Construction
  5.4.1. Outlook
  5.4.2. Project analytics
5.5. Energy and Utilities Construction
  5.5.1. Outlook
  5.5.2. Project analytics
5.6. Institutional Construction
  5.6.1. Outlook
  5.6.2. Project analytics
5.7. Residential Construction
  5.7.1. Outlook
  5.7.2. Project analytics

6. KEY INDUSTRY PARTICIPANTS

6.1. Contractors
6.2. Consultants

7. APPENDIX

7.1. What is this Report About?
7.2. Definitions

8. ABOUT GLOBALDATA

8.1. GlobalData at a Glance
8.2. GlobalData Construction
8.3. Disclaimer
8.4. Contact Us

LIST OF FIGURES

Figure 1: Key Markets, Construction Output Growth Matrix and Risk Matrix
Figure 2: Canada, Construction Projects Pipeline by Sector (CAD Billion)
Figure 3: Canada, Construction Permits Value (CAD, Million)
Figure 4: Canada, Industrial Building Investment (CAD, Million)
Figure 5: Canada, Risk Profile
Figure 6: Canada, Risk Comparison
Figure 7: Canada, Construction Output Value (Real, US$ billion, 2017 prices and exchange rate)
Figure 8: Canada, Construction Output Value, Growth Matrix
Figure 9: Canada, Construction Output Value, by Sector (CAD Million), 2014-2023
Figure 10: Canada, Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 11: Canada, Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 12: Canada, Commercial Construction Output by Project Type (CAD Million), 2014-2023
Figure 13: Canada, Commercial Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 14: Canada, Commercial Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 15: Canada, Industrial Construction Output by Project Type (CAD Million), 2014-2023
Figure 16: Canada, Industrial Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 17: Canada, Industrial Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 18: Canada, Infrastructure Construction Output by Project Type (CAD Million), 2014-2023
Figure 19: Canada, Infrastructure Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 20: Canada, Infrastructure Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 21: Canada, Energy and Utilities Construction Output by Project Type (CAD Million), 2014-2023
Figure 22: Canada, Energy and Utilities Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 23: Canada, Energy and Utilities Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 24: Canada, Institutional Construction Output by Project Type (CAD Million), 2014-2023
Figure 25: Canada, Institutional Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 26: Canada, Institutional Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 27: Canada, Residential Construction Output by Project Type (CAD Million), 2014-2023
Figure 28: Canada, Residential Construction Projects Pipeline, Value by Stage (CAD Million)
Figure 29: Canada, Residential Construction Projects Pipeline, Projected Annual Spending by Stage (CAD Million), 2018-2023
Figure 30: Canada, Headquarters of Key Contractors (% of Total Project Pipeline)
Figure 31: Canada, Headquarters of Foreign Contractors (% of Project Pipeline with Foreign Contractor)
Figure 32: Canada, Headquarters of Key Consultants (% of Total Project Pipeline)
Figure 33: Canada, Headquarters of Foreign Consultants (% of Project Pipeline with Foreign Consultants)

Canada’s construction industry output declined by 17.7% in 2009 but rebounded quickly from the economic downturn with a 17.2% growth in 2010 and 7.8% growth in 2011. A slowdown in the Canadian economy in 2012, in the second half in particular and government measures to limit household debt decelerated the construction industry’s growth.

According to Statistics Canada, the number of housing starts increased from 193,950 units in 2011 to 214,827 units in 2012. Ontario recorded the largest number of housing starts in 2012 at 76,742 units, followed by Quebec with 47,367 units and Alberta with 33,396. The total value of building permits continued to increase in the first five months of 2013. Building permits for single-family dwellings rose by 4.4% in May 2013, reaching CAD2.3 billion (US$2.3 billion), the fourth increase in five months.

Growth Matrix for Construction Output In Canada

Growth Matrix for Construction Output In Canada 

Advances were posted in eight provinces with Ontario, Alberta and Quebec accounting for most of the gain. Building permits for multi-family dwellings recorded a third consecutive monthly increase, up to 4.0% to CAD2.2 billion (US$2.2 billion) in May following a 51.2% advance in April. While the trend is moving upwards, the total value of residential building permits issued in January-May 2013 remains lower than the value of permits issued in same period in 2012 by 1.6%.

Residential construction was the largest market in Canada in 2012, valuing CAD111.9 billion (US$113.2 billion) and accounting for a 39.8% share. The market recorded a significant decline of 18.6% in 2009. However, a strong economic recovery after the economic crisis supported the growth of housing construction in Canada from 2010 to early 2012. A slowing economy in the later part of 2012 and tightened mortgage rules led to a deceleration in housing demand and construction. Construction activity is expected to pick up by the end of 2013 and over 2014, as economic and employment growth support the residential construction market. 

The material was prepared in September, 2013.

LIST OF TABLES

Table 1: Construction Outlook
Table 2: Canada, Key Economic Indicators
Table 3: Canada, Construction Output Value (nominal, CAD Million)
Table 4: Canada, Construction Output Value (nominal, US$ Million)
Table 5: Canada, Top Commercial Construction Projects by Value
Table 6: Canada, Top Industrial Construction Projects by Value
Table 7: Canada, Top Infrastructure Construction Projects by Value
Table 8: Canada, Top Energy and Utilities Construction Projects by Value
Table 9: Canada, Top Institutional Construction Projects by Value
Table 10: Canada, Top Residential and Mixed-Use Construction Projects by Value
Table 11: Canada, Key Contractors
Table 12: Canada, Key Consultants
Table 13: GlobalData Construction Market Definitions
Table 14: Construction Risk Index Ratings and Scores

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