Construction report: Industry shifts into recovery mode

Sector experts weigh in with their 2021 forecasts

The outlook for B.C.’s construction industry is optimistic, say sector leaders | Rob Kruyt

Construction industry experts predict a positive outlook for 2021 – with some challenges – as COVID-19 vaccinations ramp up across B.C. and the sector prepares for a busy year led by major infrastructure projects.

Association heads agree that megaprojects, such as the Site C dam, liquefied natural gas infrastructure, the Broadway subway project and the new St. Paul’s Hospital, will drive much of the industry’s recovery. Under the province’s current public health order, construction can continue, but daily in-person health screenings of all on-site workers and up-to-date safety plans are still required.

“We expect that infrastructure investment will play a major role in our economic recovery and the strategies across the province,” said Chris Atchison, president of the BC Construction Association (BCCA).

Atchison said the industry is ready for megaprojects, and he’s hoping provincial and federal commitments to infrastructure funding are handled in a “strategic and mindful” way. He said this is needed to ensure competing companies bidding on work have the skilled workforce and the capacity as supply chain issues and higher materials costs may continue to be challenges.

“Not all of the new projects can hit the market at once, so there needs to be a rollout plan,” he explained. “We want to make sure it’s not a Wild West situation.”

While the industry experienced a slowdown in 2020, Atchison said it wasn’t hit as hard as other sectors. The industry saw an 8% drop in the size of its provincewide workforce over the past year.

Job opportunities exist for people displaced from other industries in 2020, according to Atchison, who said the sector continues to have a skilled labour shortage and is looking at ways to diversify its workforce to attract younger workers, women, Indigenous people and newcomers to Canada.

The BCCA is also pushing for prompt-payment legislation to ensure that businesses continue to have enough cash flow to keep operating.

“The province of British Columbia is being very slow to move on what is something that should be an expectation of payment certainty for substantial completion on jobs,” said Atchison.

Atchison said he expects COVID safety protocols to continue to be in place for the foreseeable future until the end of 2021, and possibly into 2022.

Chris Gardner, president of the Independent Contractors and Businesses Association of BC (ICBA), agreed the industry is seeing positive signs of economic recovery.

“We are noticing a significant uptick in the level of activity in the residential construction sector, particularly on high-rise residential projects,” said Gardner. “The shortage of supply, combined with low interest rates and strong demand, is bringing developers back to the market much faster than we had thought at the beginning of the year.”

As it addresses the worker shortage, lower apprenticeship completion rates and government policy issues, the industry continues to offer a wide range of opportunities, according to Gardner.

“Jobs in construction are resilient,” he said. “Construction was deemed an essential service during the shutdown of large parts of the economy. Construction workers kept working through the darkest days of COVID-19.”

ICBA’s annual Wage and Benefits Survey, released in late 2020, found that the industry kept about 250,000 people working provincewide, yet pandemic-related uncertainty reduced construction activity by about 10% last year.

Mechanical contracting

Kim Barbero, CEO of the Mechanical Contractors Association of BC, said upcoming megaprojects show confidence in the province’s future.

“The government’s large infrastructure projects certainly make for renewed optimism, as does the potential of fully operational commercial buildings,” Barbero said.

While the pandemic has caused an interruption, the forecast for mechanical contracting has not changed, nor have the challenges, she said.

“I see continued high demand for qualified mechanical contracting expertise in B.C.,” she predicted. “They are needed to fulfil the planned projects and to replace the growing number of retirees in the industry over the next 10 years.”

Barbero said many of the adjustments made will continue, such as a higher reliance on technology and prefabrication methods used to meet tight timelines while working in limited space on job sites.

“I believe that health and sanitary protocols introduced with the pandemic will influence best practices going forward.”

Electrical contracting

Deborah Cahill, president of the Electrical Contractors Association of BC, said while there are many projects to bid on this year, some contractors are struggling more than others.

“I’m hearing that smaller contractors have been harder hit than the larger companies, but it really is a case-by-case basis. While some contractors may be back to normal, I’m not seeing economic recovery take hold across our entire membership yet.”

Cahill called it “premature” to look ahead to reduced restrictions and she expects health protocols to remain in place on job sites this year.

Cahill said the B.C. real estate market indicates a low inventory of residential units, and she’s hoping to see an increase in residential construction.

“The recovery will continue, but it is still going to take a few months for us to get back to pre-COVID levels,” she predicted, adding that securing materials and finding skilled tradespersons, project managers, estimators and other staff will continue to be the biggest challenges. •


B.C. construction and maintenance industry by the numbers

B.C.’s construction and maintenance sector will grow this year following 2020 – the industry’s first year of decline in activity in more than a decade.

•Over the next 10 years, construction and maintenance industry employment is expected to rise by 17,800 workers, or about 10% more than the current labour force.

•Between now and 2022, the non-residential sector is expected to require an additional 11,500 workers, or upwards of 16%, with much of the growth in Metro Vancouver.

•About 41,000 construction industry workers, or 22% of the current labour force, will retire by 2030. To keep up with demand, B.C. will need to recruit close to 59,650 workers in the next decade.

•In 2020, about 32,700 women were employed in B.C.’s construction industry – 34% worked directly on projects. Of 175,900 tradespersons, women made up 6% of the total.

•In 2020, nearly 6% of B.C.’s construction labour force was made up of Indigenous people – 82% worked directly on projects.

•B.C.’s construction labour force consists of about 24% new Canadians – 5% lower than the overall share of immigrants in the provincial labour force.

Source: BuildForce Canada