Ontario Construction Secretariat’s annual survey points to stronger year for building construction industry

By bdeditor On Feb 17, 2011

According to a comprehensive survey of the construction industry in Ontario, almost half of building contractors in the province expect that they’ll be busier this year than in 2010.

The annual survey of industrial, commercial and institutional building contractors reveals that 44 per cent anticipate more work this year, and 34 per cent expect to increase their number of employees. The survey, parts of which were released by the Ontario Construction Secretariat, was conducted by Ipsos Reid.

“There’s good news this year, but it is tempered with some underlying caution,” notes Sean Strickland, CEO of the Secretariat. While 55 per cent of survey respondents express optimism about the economy, this number is soft in that it is largely made up of those who say the economy is only ‘somewhat good’ rather than ‘very good’.

“Like most Canadians, Ontario’s contractors are optimistic about the future, but are concerned about how much business expansion will actually occur in the coming year,” says Strickland.

Firms in the GTA are the most positive about their prospects. Those in Southwestern Ontario and particularly firms in the Windsor-Sarnia region, hit by the slowdown in the auto and petrochemical industries, are the most negative.

Firms located in the GTA and Central Ontario are the most likely to be anticipating workforce increases this year, which is consistent with their forecast for an improved level of business. Given a tougher year expected by contractors in Southwestern Ontario, it is not surprising that firms in that region are less likely to anticipate expanding payrolls in 2011.

According to the survey, the commercial sector is expected to lead in increased construction activity this year followed by the industrial sector. The percentage of contractors expecting to conduct more work in the institutional sector is down from 2010, consistent with the perception that the budget constraints of government will slow institutional projects.

Building contractors identify three factors that continue to limit their growth:

Skilled Labour – The availability of skilled labour and staff is seen as the key barrier to business expansion. Furthermore, only 18 per cent of the survey respondents expect the availability of skilled construction workers to increase in 2011. This points to the need for further awareness of career opportunities in the skilled trades and improved employment opportunities for apprentices with construction employers.
Economic Issues – While 2010 was a better year for contractors, it appears that the effects of the recession are still lingering in their minds. Case in point, survey respondents are only cautiously optimistic about Ontario’s economic prospects and the ability of the private sector to be a growth leader. Employers are still concerned about access to financing, cash flow and the availability of new projects.
The Competitive Nature of the Industry – Almost half (46 per cent) of all firms expect the level of competition from other firms to increase in 2011. The industry is highly fragmented, with the vast majority of firms (86 per cent) employing fewer than 50 individuals. 67 per cent of firms work on projects valued at less than $500,000.