Industry Overview
Canadian Commercial Improving corporate profits, low interest rates and decreasing office vacancy rates are fueling the office building market, especially in Western Canada and the country’s downtown markets. Traditional business and financial services are the primary sectors driving the development of new office buildings, although the information technology sector and government outsourcing are helping to propel growth. There is also renewed interest in hotel developments. Natural resource-related producers and manufacturers in Western Canada are also driving industrial construction spending. Demand for storage, warehousing, distribution and transportation facilities are also helping this sector. Demand for hospitals, schools and government buildings are driving the institutional building market, with British Columbia, Alberta and Ontario providing most of the demand. Increased public infrastructure building and large, energy-related private sector projects are driving engineering projects. Because of Canada’s strong prospects in energy resources, engineering construction may see growth in oil, petrochemical and pipeline facility construction. Critical Issues Challenges facing the non-residential construction sector are: Lack of Skilled Labor - Alberta currently employs 33 percent more workers in the industrial, residential, commercial, institutional and infrastructure construction industry than in the late 1970s and early 1980s. Because analysts believe the province will need even more workers in the near-term, contractors are considering importing temporary foreign workers despite costs of $7,000 per person. Rising energy and Materials Costs - Energy, raw material and variable production costs incurred by materials producers are passed on to the consumer. For example, liquid asphalt cement prices are soaring. Rising Property Taxes - Taxes and other municipal fees as well as arduous building code requirements and more stringent environmental regulations are straining construction companies in Canada.
Canadian Commercial
Improving corporate profits, low interest rates and decreasing office vacancy rates are fueling the office building market, especially in Western Canada and the country’s downtown markets. Traditional business and financial services are the primary sectors driving the development of new office buildings, although the information technology sector and government outsourcing are helping to propel growth. There is also renewed interest in hotel developments.
Natural resource-related producers and manufacturers in Western Canada are also driving industrial construction spending. Demand for storage, warehousing, distribution and transportation facilities are also helping this sector.
Demand for hospitals, schools and government buildings are driving the institutional building market, with British Columbia, Alberta and Ontario providing most of the demand.
Increased public infrastructure building and large, energy-related private sector projects are driving engineering projects. Because of Canada’s strong prospects in energy resources, engineering construction may see growth in oil, petrochemical and pipeline facility construction. Critical Issues Challenges facing the non-residential construction sector are: Lack of Skilled Labor - Alberta currently employs 33 percent more workers in the industrial, residential, commercial, institutional and infrastructure construction industry than in the late 1970s and early 1980s. Because analysts believe the province will need even more workers in the near-term, contractors are considering importing temporary foreign workers despite costs of $7,000 per person. Rising energy and Materials Costs - Energy, raw material and variable production costs incurred by materials producers are passed on to the consumer. For example, liquid asphalt cement prices are soaring. Rising Property Taxes - Taxes and other municipal fees as well as arduous building code requirements and more stringent environmental regulations are straining construction companies in Canada.
Critical Issues
Challenges facing the non-residential construction sector are:
Lack of Skilled Labor - Alberta currently employs 33 percent more workers in the industrial, residential, commercial, institutional and infrastructure construction industry than in the late 1970s and early 1980s. Because analysts believe the province will need even more workers in the near-term, contractors are considering importing temporary foreign workers despite costs of $7,000 per person.
Rising energy and Materials Costs - Energy, raw material and variable production costs incurred by materials producers are passed on to the consumer. For example, liquid asphalt cement prices are soaring.
Rising Property Taxes - Taxes and other municipal fees as well as arduous building code requirements and more stringent environmental regulations are straining construction companies in Canada.