Toronto, ON — With Canada’s economic growth forecast projected to return to positive territory in 2021, the overall outlook for construction remains favourable, albeit with some regional variation, according to latest Market Intelligence Report from construction consultancy BTY.
According to the report, BTY expects recovery efforts and accelerated trends from 2020 will spur investment opportunities in best positioned markets and sectors in the New Year.
The report forecasts projected construction cost escalation in Canada, with moderate escalation of 3 to 5 per cent in Ontario, British Columbia, and Quebec, with low escalation in Alberta (1% to 3 per cent Saskatchewan (0 to 2 per cent), Manitoba (1 to 3 per cent), and the Atlantic Provinces (0 to 2 per cent).
“The construction industry’s ability to rally after pandemic lockdowns and return to work safely reflects the resilience and adaptability it has shown through past crises and economic downturns,” said BTY’s managing director Toby Mallinder.
The continuing impacts of COVID-19 on construction are being felt unevenly by province as well as sector, creating a mixed economic outlook across the country. While the residential forecast grew strongly in late 2020, uncertainty remains about longer-term expansion given the sharp drop in immigration and reduced foreign direct investment due to the pandemic.
“In the longer term, we are expecting changes driven by COVID-19—especially in technology—to accelerate improved productivity,” added Mallinder. “Achieving—and surpassing—pre-2020 construction activity levels still depends on a robust economic recovery supported by a speedy, successful and sustained vaccine rollout.”
Here is a province-by-province summary:
Ontario: An already robust infrastructure program – bolstered by increased government stimulus spending – will help offset sharp declines in commercial building and a projected dip in housing starts.
British Columbia: Mega energy projects, a long roster of major infrastructure projects and government stimulus spending will keep BC construction buoyant.
Alberta: The second sharpest economic contraction among provinces will prolong the return of construction to pre-2020 levels. The bright spot is rapidly growing private sector investment in renewables.
Saskatchewan: Continuing weakness in the energy and mineral mining sectors are slowing recovery, but booming agri-food production and exports will help the Province weather the storm until recovery takes hold.
Manitoba: Manitoba—expected to experience the least economic impact from COVID-19—will still see construction declines across the board despite new government infrastructure spending.
Quebec: With multiple major transportation projects underway, supported by added government investment in infrastructure, the non-residential sector should soon return to pre-2020 levels. Residential recovery may take longer to gain momentum but remains one of the hottest markets in the country.
Atlantic Canada: Buoyed by major capital spending, Nova Scotia and New Brunswick will bounce back stronger and faster than Prince Edward Island and Newfoundland and Labrador. Slow—and even negative population growth—will be an added drag.