The findings of the annual BC Construction Association (BCCA) Industry Survey highlight the operational stresses facing construction employers across B.C. The results, taken from over 1,300 respondents, paint a picture of concern and stress. The demand is high for construction services, but labour supply, costs, and faltering public sector standards and systems around permits, contracts, procurement, and payments are undermining development and putting B.C.'s builders in a tough spot.
"It's true that labour shortages and the cost of materials are constant challenges," says Chris Atchison, president of the BCCA. "But the industry can manage these pressures – it's what we do. The biggest hindrances to building housing and other infrastructure today are the associated operations of the authorities having jurisdiction, from crowns to ministries and municipalities."
The survey reveals that over 80 percent of contractors, regardless of size, were paid late for their substantially completed work at least once this past year. Nearly half of the large contractors (100 employees plus) report being paid late at least 25 percent of the time, and 30 percent of small contractors (20 employees or less) report the same. With the cost of borrowing skyrocketing, financing projects for owners is a burden most businesses cannot afford.
Contract disputes related to costs are a common occurrence, with 44 percent of small contractors saying they've filed a fixed price contract dispute in the last 12 months, compared to 31 percent of medium contractors and 28 percent of large.
Interest in public sector projects has waned, with only 45 percent of large contractors saying they're "very likely" to bid, versus less than 20 percent of small contractors. Reasons given for lack of interest include "don't need the work", "contracts favour the owner", "process favours larger companies", and "same companies win every time".
These and other pressures are squeezing the small contractors, 61 percent of whom report thinking about leaving the industry. The average company size has decreased 11 percent over the last three years to an average of 6.24 workers. Approximately 92 percent of companies in the industry employ 10 workers or fewer.
On the workforce side, labourers and skilled workers are reaping the benefits of short supply. The job market remains highly competitive, driving annual earnings up 22 percent in the last five years to an average of $70,088. Most workers are working full-time and earning overtime, and roughly 45 percent of respondents reported changing employers within the last year, with the number one reason being higher pay.
The skills shortage has improved significantly over the last five years, and although the industry is still short 6,000 skilled workers, that is a substantial improvement from the 49,800-person gap estimated for 2023 ten years ago.
Most respondents report pursuing another career path prior to construction, with 55 percent of apprentices holding some university credits. All levels of talent, from labourers to journeypersons, are equally likely to hold an academic degree (seven percent), and 48 percent of apprentices owe more than $10,000 in academic student loan debt.
One of the most disappointing trends this year is the 21 percent decrease in tradeswomen, a sharp reversal after several years of solid gains. Women comprise only 4.5 percent of the 163,900 skilled tradespeople in BC's construction industry, down from 6 percent in 2020.
"There are many retirements and we're fighting hard to find new talent," says Atchison. "But the labour shortage is acutely felt beyond the crew, and that impacts costs and timelines too. The whole ecosystem is pressed for experienced staff, from the design team to the authorities having jurisdiction and the owners themselves. Contractors are deciding not to take on projects due to risk in the process as well as crew shortages."
The number of employees in the industry has grown a sizeable 17 percent year-over-year, and six percent over pre-pandemic levels, although the skilled trades workforce has decreased four percent year-over-year and 9 percent over pre-pandemic levels. This de-skilling of the overall workforce reflects that it takes four years to complete an apprenticeship and may be fueling and increasing concern about safety on the worksite from survey respondents.
The construction industry's contribution to BC's GDP is up four percent over last year, and it remains the highest employer in BC's goods sector, with 251,100 British Columbians relying directly on construction for a paycheque.
BCCA is advocating for three changes that it says will address the challenges facing BC's builders as well as the owners who need the work to be done on budget and on time. They are:
- Introduce prompt payment legislation to normalize standard, reasonable payment terms of 30 days, ensure proper invoices are paid, and give clear rights to lien holdback monies.
- Make public sector projects more attractive to the industry by having fair, open, and transparent procurement processes and reasonable contract conditions.
- Speed up the permit process with the authorities having jurisdiction, including municipalities and BC Hydro.
"Until B.C. catches up to the rest of Canada, the USA, and Britain, and introduces Prompt Payment Legislation, policy-makers need to be tuned into the fact that the financial risks for BC's contractors are nearing a breaking point." Says Atchison. "There are actions that industry and government can take together and separately that will alleviate the challenges contractors are facing."
