Ottawa, ON — Over 80 per cent of Ontario contractors feel their business prospects are in good shape this year, thanks to findings from the Ontario Construction Secretariat’s (OCS) annual contractor survey.
In 2023, 81 per cent of participants believe their business prospects will either stay the same (49 per cent) or improve (32 per cent). In contrast, only 16 per cent expected a drop in business.
“The past few years have been uncertain and difficult, particularly in the construction sector with shutdowns, closures, supply chain disruptions and labour issues. But the pipeline of work out there is staggering and generating strong demands for contractors and labour, thereby fueling contractors’ optimism about the coming year,” said Robert Bronk, chief executive officer of the OCS.
Ontario contractors are also expecting an increase in apprenticeship hiring, with 64 per cent stating they were employing apprentices. In the last three years, the percentage of contractors employing apprentices in the province ranged from 60 per cent in 2022, 61 per cent in 2021, and 68 per cent in 2020.
The increase in apprentices for this year is mainly due to unionized contractors, as 83 per cent stated they employed apprentices in 2023, an increase of seven percentage points compared to 2022. In comparison, 54 per cent of non-union contractors employed an apprentice in 2023, two percentage points higher than in 2022.
Additional highlights showed that to attract or retain more skilled workers, 67 per cent of contractors raised wages, 56 per cent promoted employees, 47 per cent improved benefits, 32 per cent offered referral bonuses, 31 per cent guaranteed overtime, and 26 per cent provided a hiring/retention bonus.
“We’re a contractor, and we actually remained fairly busy throughout the past couple of years. The prices got higher, but we didn’t slow down so that was a positive,” according to one respondent to the survey.
In 2022, 55 per cent of contractors’ work was expected to be on new construction projects, compared to 45 per cent on maintenance. For 2023, it has shifted back to an equal balance, with maintenance making up 51 per cent of the work, and new construction making up 49 per cent of their anticipated slate of projects.
Similar to 2022, 72 per cent of contractors’ work will come from repeat customers in 2023. While in 2023, 28 per cent will be from new customers.
Despite the mostly positive outlook, the availability of experienced, skilled labour and material-related costs are still prominent concerns. However, the percentage of contractors rating material costs (29 per cent) as the greatest concern is much lower than in 2022 (44 per cent). Material availability also dropped as a top concern, with 17 per cent of contractors rating it as their top concern, compared to 34 per cent in 2022.
According to contractors, 63 per cent noted cost increases as a direct result of skilled labour shortages in 2022. Additionally, the labour shortage results in 53 per cent of contractors noting project start/completion delays, 51 per cent used less qualified labour, 50 per cent had to turn down work, 37 per cent had project cancellations, and 29 per cent were hiring outside their reason.
However, fewer firms, 73 per cent, reported facing significant supply chain disruptions compared to 77 per cent in 2022.
“We’re not going through COVID anymore, and it looks like things are picking up right now. There are always challenges with everything and positives in the construction industry. We just have to look at positives,” reports a different respondent of the survey.
Despite the concerns mentioned above, contractors believe that the sheer volume of work across the province is putting more demand on the skilled construction trades. In total, 81 per cent of contractors had a positive view of the industry, with 19 per cent having an unfavourable view.
Of the 394 contractors that provided a reason for a positive outlook, 35 per cent mentioned an abundance of work, and 10 per cent noted an increase in construction activity.
The annual survey polls Ontario’s ICI contractors to gauge their business expectations for the year and capture their views on salient issues in the industry. Between Jan. 11 and Jan. 27, 500 telephone interviews were conducted with 298 trade contractors, 185 general contractors, and 17 unspecified contractors.