Diversification and continued strong investment in the transportation, energy, mining and healthcare sectors will help keep construction workloads steady with low escalation in 2012, according to BTY Group’s annual Market Intelligence Report on construction costs across Canada.
“Even with lower than expected growth in the U.S., worries over European bailouts and slower growth in residential construction in most of the country, we expect reasonably healthy levels of activity across Canada,” said Joe Rekab, managing partner at BTY Group. “The story for 2012 is that strong energy, resource and infrastructure investment should balance a cooling housing market in almost every province, with the exception of B.C. and Alberta both of which will see gains in the housing market over the previous year.”
- In Ontario, an ambitious horizontal and vertical infrastructure program will lead, but concerns over deficit spending could put some projects on hold;
- Oilsands investments of $24 billion in 2011 will fuel Alberta’s industry, and drive Canada’s strongest residential growth;
- New multibillion-dollar mining projects and on-going energy, healthcare and transportation projects will keep Quebec busy;
- More than $10 billion in new potash projects will boost construction in Saskatchewan;
- B.C. will see both strong residential activity and increased private sector investment in non-residential construction.
Following a strong first half in 2011 and a cooling in Q3, the consensus for Canada is lower than previously expected growth in 2012. The Bank of Canada will keep interest rates at historic lows, projecting that the economy will expand by only 1.9 per cent in 2012, and then improve to 2.9 per cent in 2013, with consistently low inflation. This will help keep overall construction price escalation rates low in 2012, with variations by province.
Long-term trends are for continued strong investment in oil and gas, power and mining. Companies are projected to invest some $130-billion in Canadian mines alone from 2012 to 2017, according to the Mining Association of Canada. That will help construction workloads continue to expand after 2012. This strong flow of investment reflects Canada’s attractiveness on the world stage, which Forbes Magazine acknowledged by raising Canada’s ranking from No. 4 to No. 1 in its annual assessment of the Best Countries for Business.