What are Canada's 5 Fastest Growing Industries
Housing construction is growing somewhat faster than commercial construction
Construction activity for 2021 remains uncertain
The economy has been hit hard by the corona pandemic and expectations for 2020 gross domestic product (GDP) continue to fall with the outbreak of the second wave in September. The Canadian central bank is now assuming that GDP in the current year could collapse by around 8 percent compared to 2019. The economy is expected to pick up again in the coming year (+5 percent), but even an optimistic scenario is unlikely to bring economic output back to pre-crisis levels.
The Canadian construction sector is healthy and would certainly have had a year of solid growth in 2020 without the effects of the corona pandemic. But the construction industry collapsed in March 2020. Since September, after a long lull, building construction has been picking up speed again. The value of all building permits this month was almost 22 percent above the previous year's figure. About three quarters of this growth comes from approved construction projects in the Province of Ontario.
Public investment in infrastructure is part of the plan to boost Canada's economy. Parts of the construction industry, for example public building construction or construction for traffic routes, should also benefit from this in 2021. At the same time, the ongoing corona crisis and the effects of the second wave of infections on the economy harbor risks for the already low willingness of companies to invest. The expectations for commercial construction for the first half of 2021 are therefore cautious. The demand for residential construction should remain high in the medium term due to high immigration flows and a constantly growing Canadian population. To this end, the Canadian government is promoting the expansion of social housing in many cities in the country in response to the effects of the corona.
Favorable financing conditions create incentives
There was a rapid recovery in residential construction in the 3rd quarter after a sharp decline in the 2nd quarter. The value of permits in residential construction from June to September 2020 was 7.2 percent higher than in the same period in 2019. Above all, historically favorable financing conditions and the relatively crisis-proof incomes in higher-income households ensure a strong order intake in residential construction despite the ongoing economic downturn.
The strong 3rd quarter, however, is partly a catch-up effect, which results from the corona-related stoppage in spring, believes the Bank of Canada. In addition, a survey by the bank in the third quarter showed that the pandemic led to changed preferences in the type of residential accommodation in a quarter of the households surveyed and that these households were pushing to live more generously or in single-family homes. Mobile working and the desire for more opportunities to retreat in times of social distancing and temporary school closings are fueling this development.
Households postpone modernizations and renovations during the crisis
The Building, Industry and Land Development Association (BILD) sees the market for building renovation and modernization suffering from the corona crisis. The otherwise important sector for the construction industry amounted to 60 billion US dollars in 2019 and employs around 700,000 people. Building renovation has recently grown faster than the economy as a whole and is an area with potential in Canadian building construction. In the corona crisis, however, real estate companies and building contractors see the modernization intentions of many households dwindling.
Commercial and public buildings have been weak for a long time, but are now on the upswing again
The economy in commercial construction is also picking up again. The value of building permits rose again significantly for the first time in September and was even 16 percent above the figure for the same month last year. On the one hand, these are catch-up effects from the weak previous months in 2020, and on the other hand, additional permits for major projects in Ontario such as the "Python Project" in Ottawa and the "Breithaupt Block" project in Kitchener are making a disproportionate contribution to the September growth. But industrial construction was also able to grow again in many provinces at the end of the third quarter.
Commercial construction and the public construction sector suffered the sharpest cuts in the corona crisis between March and August 2020. In this period, building permits in the sector were 26 percent lower than in the same period in 2019. The lean period in these areas of the construction industry thus lasted significantly longer than in residential construction.
Tense labor market
The industry association "BuildForce Canada" sees the labor market in the construction industry under pressure. Both the aging workforce in the construction industry and the insufficient mobility of workers, especially in the corona crisis, will increase the need for qualified workers in the construction industry in the next few years, according to BuildForce. In order to compensate for the demand, the association expects a gap of over 300,000 employees, which will have to be filled by 2029.
Regionally, BuildForce sees the province of British Columbia as the fastest growing market in the construction industry in 2021, mainly due to large infrastructure projects. Ontario's need for workers in construction is also likely to remain high in 2021 and beyond. Among other things, transport infrastructure projects but also large modernization projects in two nuclear power plants are generating increased demand. In the Atlantic provinces, the association sees an increased need for workers, especially in Nova Scotia and Prince Edward Island, and justifies this through the increasing housing construction and numerous projects for health facilities that will be initiated in the coming years.
Value of building permits in Canada (in million euros, change in percent) 1) 2)
Change 2020/19 3)
Total building permits value, thereof
Single family homes
Commercial and office building
Public construction (excluding civil engineering projects)
Investments in building construction have been increasing again since May 2020 and in the last reporting months available (July, August 2020) were above the previous year's values.
Selected building construction projects in Canada
Investment amount (in million euros)
Panda Markham Condominium,
In planning / schematic design
In planning / schematic design
Vancouver, British Columbia
In planning / schematic design
Squamish Nation / Westbank Projects Corp.
In planning / concept phase
National Capital Commission
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