Challenging year ahead – but Ontario’s construction industry likely to fare better than much of Canada and the US: FMI

Ontario’s construction economy is expected to continue to experience challenges in 2021, but will fare better than much of the rest of the country and the US overall, says Raleigh, NC-based consultant and investment banker FMI Corporation.

“Ontario’s economy is among the strongest in the country,” the consultants say in the FMI Engineering and Construction Outlook First Quarter 2021 Report.

fmi cover 2021

“Low interest rates and pandemic-related factors have caused the province’s residential market to spike, with starts remaining positive likely throughout 2021,” FMI says. “A correction in residential construction will likely be seen in 2022 and 2023. Through the forecast period, investments in manufacturing, health care, communication, and highway and street will lead the province.

“Our forecast points to a modest -3% drop in 2020 and -2% drop in 2021; the long-term outlook for the province tracks at a close to 1% CAGR. Thanks to healthy labor market conditions and strong population growth, Ontario’s econo­my may rebound better than other provinces.”

Overall, in Canada last year, FMI says the expected $258 billion in construction spending represents “a sharp 6% contraction compared to 2019, or about $15.9 billion in withheld investment.”

“For 2021, FMI forecasts total spending to continue to drop, dipping 3% to $249 billion.”

“Recovery is anticipated to begin in 2022, with activity climbing back to $273 billion by 2024,” FMI says. “Although this is not an explosive recovery, considering the turbulent year of 2020 – from volatile oil prices to trade uncertainty to social and economic upheaval due to coronavirus-related protection measures – a -0.1% compound annual growth rate (CAGR) across the forecast period feels like a relief.”


Please enter your comment!
Please enter your name here

I accept the Privacy Policy

This site uses Akismet to reduce spam. Learn how your comment data is processed.