Ontario Construction News staff writer
As the Ontario construction industry enters 2025, contractors are facing both optimism and uncertainty, according to the annual Ontario Construction Secretariat Contractorย Surveyย .
Released at the 25th Annual State of the Industry and Outlook Conference in Toronto, the survey found two-thirds of Ontario contractors (67 per cent) say they are feeling positive about the future of Ontarioโs construction industry, eight in 10 predict stable or rising revenues in 2025 and more than a quarter (28 per cent) are expected to increase the number of employees on their team.
โAs we entered 2025, contractors had a lot on their mind โ a second term for President Donald Trump, a possible (now realized) trade war with the US, a federal leadership campaign and a provincial election,โ the report concluded. โAll this noise raises political and economic uncertainty in addition to the day-to-day concerns and challenges of operating a construction company.
โGiven this environment, it is unsurprising that we see some cracks emerging in contractorsโ outlook for 2025 with an equal share of contractors expecting more work as those anticipating less.โ
Hereโs a summary of what they expect in the coming year:
Optimism vs. Uncertainty:
- 50% of contractors expect more work in 2025.
- 50% expect less or about the same amount of work.
- Contractors cite political factors, such as a potential trade war and elections, adding to the uncertainty.
Revenue Outlook:
- Eight of 10 contractors expect stable or growing revenue in 2025 – a slight improvement compared to 2024.
Hiring Expectations:
- 28% plan to hire more workers, but this is down slightly from last year.
- Some regions, like Southwestern and Eastern Ontario, are more optimistic, while the Greater Toronto Area (GTA) is more cautious.
Material Costs and Labor Shortages:
- 35% of contractors are concerned about rising material costsโup from 28% last year.
- 58% anticipate difficulty accessing skilled labor, a concern that has persisted from 2024.
- These challenges lead to higher project costs, delays, and cancellations.
Impact of labour shortages:
- 70% to face rising costs.
- 50% to use less qualified labor.
- 49% to experience project delays.
- 34% to cancel projects.
- Hiring apprentices is seen as a solution, with 70% of contractors employing them (up from 58% last year).
Technology Adoption:
- 85% of contractors say adopting new technologies is important for their future success and the biggest drivers of adoption are:
- Increasing productivity (26%).
- Meeting client needs (22%).
- Reducing costs (22%).
Training challenges and emerging technologies:
- The use of advanced building materials has risen to 41% (up from 35% in 2024).
- AI adoption is growing, with 18% of contractors using it in 2025 (up from 11% in 2024), and 21% expect to use AI in the next 5 years.
- Popular AI tools being explored include:
- Generative design (helps create various design options).
- Predictive analytics (forecasts project timelines and costs).
- AI-driven safety monitoring (improves safety with real-time data).
Large firms are more likely to lead the way in adopting new technologies, given the higher costs and resource requirements.