Toronto, ON — Nine out of 10 construction companies feel confident with industry conditions. This comes from a recent report done by software company Procore Technologies, titled “How We Build Now: Technology and industry trends shaping Canadian Construction in 2023.” The report examines the general sentiment of the industry, the digital maturity and adoption of construction technologies, and the challenges and opportunities that businesses face.
One of the main highlights from the report was that in the next year, seven of 10 construction businesses expect an increase in the number and value of projects.
Looking nationally, construction companies in Ontario feel the most positive about the number of projects, as 28 per cent see significant increases, while 50 per cent expect a slight increase. Eight out of 10 respondents in Ontario expect an increase in the number of projects.
Construction companies in British Columbia and Quebec expect some increases in the number of projects, with 69 per cent in Quebec and 60 per cent in British Columbia.
Regarding the total value of projects in the next year, Ontario again felt more positive, as 80 per cent expect an increase. In comparison, only 67 per cent in Alberta and 61 per cent in Quebec felt confident in the value of their projects.
Continuing with projects and future work, 92 per cent of Canadians reported an urgent need to build more or update current infrastructure in Canada over the next two years. Diving into the residential sector, the report adds that more than half of British Columbia and Alberta respondents expect to build and deliver fewer housing units in 2023. Compared to Ontario, 60 per cent of respondents expect to build and deliver more housing units.
While results sway between regions in the residential sector, 43 per cent expect to build more housing units in 2023.
With the Canadian government committing the country to achieve net zero emissions by 2050, the construction industry is expected to be responsible for around eight per cent of Canada’s total greenhouse gas emissions.
As a result, 50 per cent of owners and nearly half of general contractors (48 per cent) and subcontractors (47 per cent) report having started to focus on strategies like prefabrication and improved material selection to reduce the carbon footprint of projects.
Additionally, 41 per cent of all respondents are either tracking or plan to start tracking carbon emissions on their projects within the next 12 months.
Concerns within industry
The report highlights that while there is positivity about work in the future, companies are still concerned about certain challenges within the industry. The more significant challenges are the sheer complexity of projects, cost inflation of materials and labour, and the labour shortage.
The report shows that hiring and retaining skilled labour is one of their top challenges over the next 12 months. Almost a third of companies reported being unable to take on more projects over the past six months due to the labour shortage.
To help bring in more skilled workers, 38 per cent of respondents acknowledged that the industry needs to improve diversity and inclusion in construction workplaces to attract women, minorities and historically underrepresented groups. Currently, only 22 per cent of executive staff at trade contractors are female compared with around 25 per cent at owners and general contractors.
The report states that just over four in ten (41 per cent) of respondents have a diversity and inclusion policy, with another 45 per cent planning to implement one in the next 12 months.
Despite some labour challenges, respondents are optimistic as eight out of 10 (80 per cent) are confident they will have enough people to meet their organizational needs and the necessary skills to meet demand over the next 12 months. Furthermore, respondents added that they are going digital to help overcome labour shortages, as 20 per cent consider themselves a digital-first business, and 51 per cent are on the way to adopting digital formats and workflows.
Respondents reported that on average, 48 per cent of their projects go over budget and over schedule. In British Columbia, 40 per cent of their projects went over budget compared with 48 per cent in Ontario, 50 per cent in Alberta, and 51 per cent in Quebec.
When discussing the schedule of projects, respondents from Quebec reported slightly worse performance, with over 52 per cent of their projects going over schedule, as compared to 51 per cent in Alberta, 47 per cent in Ontario, and 45 per cent in British Columbia.
Regarding cost inflation, over a third (34 per cent) of general contractors and 32 per cent of subcontractors reported being unable to pass materials price increases onto owners.
Additionally, supply chain problems have varying effects throughout Canada. Quebec-based respondents report the highest impact, with 41 per cent reporting significant delays due to supply chain issues, compared to 35 per cent of respondents from Ontario and just 25 per cent of respondents in British Columbia.
The report surveyed 502 construction industry stakeholders. Of the 502 surveyed, 33 per cent were owners, 34 per cent were general contractors, and 33 per cent were subcontractors.