Ontario Construction News staff writer
Labour market challenges could be an ongoing preoccupation across Ontario as unemployment rates return to pre-pandemic lows, and construction demand in the residential and non-residential sectors is sustained through at least 2026.
BuildForce Canada published its 2022–2027 Construction and Maintenance Looking Forward report last week, focusing on the next six-years of provincial labour market data.
The report shows Ontario’s construction and maintenance sector experienced a slight decline in employment in 2020 due to the COVID-19 pandemic and bounced back in 2021 on the strength of a surge in new-housing construction and a 5 per cent jump in non-residential investment.
Increased demand, supply chain disruptions and sluggish labour growth contributed to recruiting challenges across all regional markets throughout the province, the BuildForce report states, adding demands are “unlikely to change through the remainder of the forecast period, and labour challenges may result”.
Total construction employment in Ontario is anticipated to reach a peak in 2023 at 13,400, a three per cent increase from 2021. Then demand for new-home construction will drop by more than 11,000 workers, or approximately 5 per cent of the 2021 workforce by 2027.
“Ontario’s construction and maintenance industry showed tremendous resilience throughout the pandemic in 2020,” says Bill Ferreira, executive director of BuildForce Canada.
“By shifting resources, effectively managing risk and new health protocols, as well as expectations, the industry quickly rebounded in 2021. However, ongoing strong employment demands and a lag in the return to the labour force of some older workers contributed to labour supply constraints for most trades and occupations and pushed unemployment rates in the province’s construction labour force to near record-low levels.”
Demands created by major infrastructure projects will increase the non-residential construction workforce by 23,000 (an increase of 12% of the 2021 labour force) through 2026 and in the non-residential sector, the number of new workers is expected to exceed the number of workers retiring.
BuildForce Canada projects that these market challenges could persist through the forecast period due to strong residential construction markets and a growing inventory of current and proposed major projects that are not expected to wane until 2026.
Here’s what the report predicts for various regions:
- With improved rail transportation, an increase in telecommuting and low lending rates fueled increased demand for new housing and renovation activity in 2020 and 2021. Regional construction activity is expected to peak in 2022 before moderating through the end of the forecast period.
- Construction employment in the region is expected to rise by two per cent, or by just over 2,400 workers, by 2027.
- One of the tightest provincial labour markets in 2021 and recruiting challenges are expected to intensify over the next few years as several infrastructure and institutional projects ramp up simultaneously.
- Construction employment in the region is expected to reach a peak in 2024 and remain elevated through the remainder of the forecast period. By 2027, a rise in overall employment alongside an estimated 7,000 retirements will require the local industry to recruit an additional 9,800 workers.
The Greater Toronto Area (GTA)
- returned to pre-pandemic levels in 2021, led by strong gains in the residential sector which is expected to ease over the short term
- non-residential activity continues to expand to 2026, driven by investments in large-scale public transportation, nuclear refurbishment, new hospital, and other government building restoration projects. Regional construction employment is estimated to increase by some 9,900 workers (+6.2%) by 2027 compared to 2021.
- expected to see a peak in construction employment in 2022 and 2023, as demand for major mining and utility projects are complemented by increased institutional-sector investment and a moderate increase in residential activity.
- construction employment is expected to fall by nearly 950 workers (-4%) compared to 2021 levels by 2027
- among the strongest construction markets in Canada in 2020 and 2021
- labour demands will peak in 2022 as commercial building activity recovers from the pandemic and residential demands continue to increase.
- Ongoing work on the Gordie Howe International Bridge in Windsor, Bruce Power’s nuclear refurbishment and industrial maintenance work in Sarnia keep demand levels elevated
- Construction employment expected to decline by about 2,800 workers (-4%) over the forecast period, but recruitment pressures will remain due to the need to replace slightly more than 7,000 workers.
The report concludes that Ontario’s large pipeline of major infrastructure projects, combined with sustained levels of new-housing and renovation activity, is projected to increase construction employment by 15,500 workers over the 2021 labour force. The retirement of more than 56,300 workers – 13 per cent of the current labour force – will increase the recruitment requirements for the industry to approximately 71,800 workers over the six-year forecast period.