Canadian construction looks as good in 2008 as 2007
The construction industry in Canada is set to continue another year of strong growth, according to an economic forecast report released in December by the Canadian Construction Association (CCA) and the Construction Sector Council (CSC). This report is based on the construction outlook prepared by the CSC as part of its 2007 Labour Market Information program.
According to the forecast data, the overall construction industry in Canada will post a growth rate of 3.5 percent by the end of 2007. For 2008, the forecast suggests the industry will grow by 3.1 percent. However, some differences emerge between the residential and non-residential construction markets. It is expected that investment in the non-residential construction market will have grown by an impressive 7.9 percent in 2007, whereas the residential construction market will level off compared to previous years, slowing down by 2.4 percent compared to 2006. The same trend will be evident in 2008 – investment in the non-residential sector is expected to grow by 5 percent, and by 0.3 percent in the residential sector (there is a new CSC online forecast delivery website that enables users to customize their searches for economic and employment forecast information by province and regions; it is available at www.constructionforecasts.ca.) Statscan figures show that Canada’s employment growth of 2.2 percent in the past twelve months far surpassed that of the United States (+0.2 percent). In addition, building on the momentum of the previous five years, employment in construction (+6.8 percent) continued to grow in 2007. Employment growth in utilities (+13.0 percent) in 2007, a more recent trend, brings employment in this industry to similar levels as those in the early 1990s.
New Brunswick had the second-highest growth rate of all provinces in 2007 (+3.6 percent), and was the only Atlantic province to record significant growth. The Canadian Outlook Economic Forecast: Winter 2008 by the Conference Board of Canada states that despite a slowdown in job growth in December 2007, the U.S. economy is expected to avoid a recession. Still, growth in U.S. household spending will be very weak over the first half of 2008. While Canadian exporters continue to cope with weak demand south of the border and a high-flying loonie, there is plenty of momentum in Canada’s domestic economy. Real final domestic demand is forecast to expand by 3.4 per cent this year. Plus, the federal government’s economic statement in late November provides a surprise – nearly $15 billion in new fiscal stimulus to shore up household spending and investment in 2008. And record-high oil prices are expected to boost overall energy investment even with weaker natural gas drilling and Alberta’s new royalty regime. Yet inflation should be kept in check – at just 1.3 per cent this year – by the strong dollar, pressure on retailers from cross-border shoppers, and the cut to the federal goods and services tax.
Finally, this positive data was confirmed to me at the recent World of Concrete trade show in Las Vegas as manufacturers kept telling me they were surprised at the number of Canadians who were there looking to buy equipment.
According to the forecast data, the overall construction industry in Canada will post a growth rate of 3.5 percent by the end of 2007. For 2008, the forecast suggests the industry will grow by 3.1 percent. However, some differences emerge between the residential and non-residential construction markets. It is expected that investment in the non-residential construction market will have grown by an impressive 7.9 percent in 2007, whereas the residential construction market will level off compared to previous years, slowing down by 2.4 percent compared to 2006. The same trend will be evident in 2008 – investment in the non-residential sector is expected to grow by 5 percent, and by 0.3 percent in the residential sector (there is a new CSC online forecast delivery website that enables users to customize their searches for economic and employment forecast information by province and regions; it is available at www.constructionforecasts.ca.) Statscan figures show that Canada’s employment growth of 2.2 percent in the past twelve months far surpassed that of the United States (+0.2 percent). In addition, building on the momentum of the previous five years, employment in construction (+6.8 percent) continued to grow in 2007. Employment growth in utilities (+13.0 percent) in 2007, a more recent trend, brings employment in this industry to similar levels as those in the early 1990s.
New Brunswick had the second-highest growth rate of all provinces in 2007 (+3.6 percent), and was the only Atlantic province to record significant growth. The Canadian Outlook Economic Forecast: Winter 2008 by the Conference Board of Canada states that despite a slowdown in job growth in December 2007, the U.S. economy is expected to avoid a recession. Still, growth in U.S. household spending will be very weak over the first half of 2008. While Canadian exporters continue to cope with weak demand south of the border and a high-flying loonie, there is plenty of momentum in Canada’s domestic economy. Real final domestic demand is forecast to expand by 3.4 per cent this year. Plus, the federal government’s economic statement in late November provides a surprise – nearly $15 billion in new fiscal stimulus to shore up household spending and investment in 2008. And record-high oil prices are expected to boost overall energy investment even with weaker natural gas drilling and Alberta’s new royalty regime. Yet inflation should be kept in check – at just 1.3 per cent this year – by the strong dollar, pressure on retailers from cross-border shoppers, and the cut to the federal goods and services tax.
Finally, this positive data was confirmed to me at the recent World of Concrete trade show in Las Vegas as manufacturers kept telling me they were surprised at the number of Canadians who were there looking to buy equipment.