Building Magazine


Canadian construction growth remains strong, says RICS Canada

The maiden RICS Canadian Construction Market Survey indicates that momentum in building activity was firm with nearly all the sectors covered registering increases in activity during Q2. This is likely to remain the same in the near term, as forward-looking indicators on workloads, employment, and profit margins suggest this positive trend will persist over the balance of this year and into 2014.

Total workloads at the headline level increased during Q2 where the net balance registered a positive reading, with 20 per cent more respondents experiencing increasing rather than decreasing workloads during the latest quarter.

Encouragingly, the survey indicates this positive trend is broad based across the industry’s sub-sectors, with all except one sector (public housing) indicating activity growth.  The strongest performing sub-sectors during Q2, in terms of momentum, were public non-housing, private industrial and private commercial.

Weakest performers (compared with the preceding quarter) were the public and private house building sectors. The results show that respondents, on average, forecast over the next 12 months total workloads to increase by 5.6 per cent, headcounts to increase by 3.3 per cent and profit margins to widen by 2.5 percentage points.

Large infrastructure projects are still driving the construction market noted respondents, including the sanctioning of LNG and oil pipelines to the coast and through the U.S. This is predicted to significantly increase output and returns in the region.

“The survey reflects the experiences and expectations of Carillion Canada, insofar as the PPP pipeline particularly should continue to generate opportunities, but an increasingly competitive marketplace will put significant pressure on margins. We believe that this ultimately creates risk for clients and opportunity for contractors to differentiate through increased innovation and value,” said Simon Buttery, president and CEO of Carillion Canada.

Survey respondents indicated the main factors limiting building activity are financial (61 per cent) and regulatory constraints (53 per cent).  In terms of skills shortages, survey respondents stated the main areas of concern were quantity surveyors and other construction professionals at 58 per cent and 55 per cent respectively.

“There are now more convincing signs that economy is picking up but with inflation below target, no change in interest rates is likely over the next twelve months. This should help to support the construction sector, underpinning further gains in both workloads and jobs. Although access to finance remains an issue for some developers, the overarching picture emanating from the survey is pretty encouraging,” said Simon Rubinsohn, RICS chief economist.

Finally, the survey measures the use of Building Information Modelling (BIM) by respondents. Around 24 per cent of respondents use BIM and of this figure, around 26 per cent use it for cost management and 20 per cent for design.  Time management and facilities management saw less intensive use of BIM at 11 per cent and 6 per cent of survey respondents respectively.

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