BTY’s 2018 CANADIAN MARKET INTELLIGENCE REPORT FORECASTS UNEVEN ESCALATION ACROSS CANADA; LOW TO MODERATE ESCALATION IN THE PRAIRIE AND ATLANTIC PROVINCES, HIGHER IN BC, ON AND QC
Investment in infrastructure and non-residential building will spur growth in Canada’s construction industry in 2018, with demand in residential sector highest in key urban centres.
Major infrastructure projects – with transportation in many of Canada’s largest cities leading the way – and strong non-residential activity, with regional variations, will help offset a projected decline in housing starts after several years of robust expansion in that sector.
High immigration levels are driving Canada’s strong population growth, the highest in the G7. The country is adding nearly 350,000 people a year, roughly the population of Greater Victoria, British Columbia. That increase is helping to support demand not only for housing, but also transportation, sewage and waste water treatment plants, schools, hospitals and commercial establishments.
Housing starts will remain strongest in urban areas where immigration is highest and land availability is constrained, in particular the Greater Toronto Area and Metro Vancouver.
“Even with uncertainties surrounding NAFTA negotiations and the potential impact on our economy, Canada’s construction industry is well positioned to adapt to shifts in market demand,” says BTY CEO Toby Mallinder.
Other factors supporting a continued healthy economic performance have been rising prices for oil, modest increases in interest rates and continued strong foreign direct investment.
ONTARIO will see infrastructure activity strengthen as housing starts moderate before they make a comeback to meet high demand from continuing population growth.
BRITISH COLUMBIA will lose some of the momentum that made it a growth leader over the past two years, but booming tech, movie and industrial sectors and sustained infrastructure investment will cushion a pullback in housing.
ALBERTA will charge ahead after three tough years to regain its position as one of Canada’s growth leaders, sparked by investments in energy, particularly in pipelines and expanded oil production, and projected high in-migration. Saskatchewan will also rebound from two subpar years, led by new investments in pipelines, heavy oil plants, and power stations.
MANITOBA will see slower slow as major hydro projects wind down; a steady residential sector and major commercial projects provide stability.
QUEBEC has a full roster of infrastructure projects and continuing strength in office building in Montreal that will exert upward pressure on escalation.
THE ATLANTIC PROVINCES will see little or modest growth overall. All lack the healthy net migration and population growth that is helping to sustain or expand construction activity in the other provinces.
This year’s report extends construction outlook profiles to include the United States, the United Kingdom, Ireland and Turkey, a further indication of the growing importance of understanding construction economic trends globally for Canadian companies involved in property and infrastructure development industries.
BTY has been publishing its annual industry review of construction cost forecasts across Canada since 2003. Over the years, the Market Intelligence Report has earned a reputation in the development, property and finance communities for crucial insight on factors behind the changing marketplace and reliable unit rate cost projections for the coming year.