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Engineering industry reports decline in 2018

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For the fourth consecutive year, the engineering industry has reported a decline in operating revenue in 2018, reports Statistics Canada. Over the same period, operating expenses also fell, decreasing 14.1 per cent to $24.8 billion. In 2018, the operating revenue was $28 billion with a decrease of 15.4 per cent since 2014.

The majority of the declines experienced over the past four years were driven by Alberta. Investments in oil and gas extraction in Alberta fell from a high of 50.1 billion in 2014 to $26.1 billion in 2017, and then to $23.7 billion in 2018. For the rest of Canada, the operating revenue for the engineering services industry grew 6.3 per cent in 2018. One of the reasons for this increase was public investments, which rose 7.6 per cent in 2018.

From 2014 to 2018, the Canadian share of operating revenue of Ontario companies providing engineering services increased from 22.2 per cent to 34.1 per cent, while the share of Alberta companies providing the same services was nearly halved, dropping from 43.2 per cent to 22.5 per cent over the same period.

Salaries, wages, commissions and benefits totaled $12 billion in 2018, accounting for 48.2 per cent of the engineering industry’s total operating expenses and continuing the upward trend observed since 2013. Demand for skilled labour has put upward pressure on industry wages. The cost of goods sold was the second-highest operating expense in 2018.

Engineering services related to the commercial, public, and institutional building engineering projects continued to rise and accounted for 17 per cent of total sales in 2018, compared with 11.1 per cent in 2013.

A similar pattern was observed for the transportation engineering projects, which were bolstered by federal government investments in infrastructure projects. They accounted for 14.3 per cent of sales in 2018, up from 8.5 per cent in 2013.

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