Infrastructure growth and non-housing construction offsetting weaknesses in other areas: RICS

The latest RICS Canada Construction Survey found that growth in infrastructure and other public non-housing construction is offsetting weaknesses in most other areas: energy, private industrial and commercial, and public housing. The survey of RICS-qualified Canadian construction professionals is conducted quarterly.

“At a high level, that’s true,” said Jeff Logan MRICS, Senior Estimator at Canadian Turner Construction, Toronto. “The downturn in the energy sector means some companies’ ability to spend on the private sector projects is less than previous years, plus the overall economy cooling means less spending on private construction projects. However, Government spending and projects are supplementing the slowing of private sector construction work.”

A net balance of 35 per cent of respondents reported a rise in their public non-housing workloads in Q3, meaning that 35 per cent more reported an increase than a decrease, while a net balance of 31 per cent reported an increase in their infrastructure workloads. Meanwhile, the energy, oil and gas sector saw a drop in activity for the eighth consecutive quarter, with a net balance of 33 per cent reporting a decrease. Net balances of 28 per cent, 18 per cent and 6 per cent, respectively, reported drops in public housing, private industrial and private commercial workloads.

As to whether the policies of the Trudeau government are boosting infrastructure projects, Logan said, “I wouldn’t say they necessarily increasing them. Infrastructure spending is already a big topic in Toronto, and transportation – both rail and highway — plus typical underground utility work, need a great deal of improvement. Much of our infrastructure is quite old and there’s a great deal of congestion, with one of the longest commute times in the world.” There’s been talk in the GTA (Greater Toronto Area) for a number of years on how to deal with this congestion, and “extensive investments in public transit systems like the GO Transit System and Toronto Transit Commission are of critical importance right now. In addition, P3 (public-private partnership) projects are continuing to move the market in the GTA, and will hopefully will help provide a solution to this severe congestion.”

The survey also found planning and regulatory issues to be the most significant obstacle to growth in Q3, with nearly three-quarters (72 per cent) of respondents reporting that as a concern. Financial constraints, competition from rivals, insufficient demand, and shortages of skilled labor (especially of quantity surveyors) comprised the other major impediments reported by survey participants.

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