Canadian Occupational Projection System (COPS)

Industrial Summary

Construction

NAICS 2361-2362; 2371-2379; 2381-2389

This industry comprises establishments primarily engaged in constructing, repairing and renovating buildings and engineering works, and in subdividing and developing land. These establishments may operate on their own account or under contract to other establishments or property owners. They may produce complete projects or just parts of projects. The industry is composed of three segments: construction of residential and non-residential buildings (industrial, commercial and institutional); heavy and civil engineering construction (such as highways, bridges, utility systems, mining, oil and gas facilities); and specialty trade contractors (such as masonry, painting and electrical work). Construction activities are oriented toward the domestic market and primarily driven by residential and non-residential investment, which is particularly sensitive to fluctuations in economic and financial conditions as well as demographic trends in Canada. The industry employed 1.4 million workers in 2016 (7.7% of total employment in the economy), with 58% in specialty trade contractors, 31% in residential and non-residential construction, and 11% in heavy and civil engineering construction (see footnote for data on GDP)( ). Employment is mostly concentrated in Ontario (36%), Alberta (18%), Quebec (17%) and British Columbia (15%). The workforce is characterized by a high proportion of men (88%) and a significant concentration of self-employed (29%). Key occupations (4-digit NOC) include:

  • Contractors and supervisors, industrial, electrical and construction trades (7201-7205)
  • Home building and renovation managers (0712)
  • Carpenters (7271)
  • Construction trade helpers and labourers (7611)
  • Electricians (7241)
  • Construction managers (0711)
  • Heavy equipment operators (7521)
  • Plumbers (7251)
  • Painters and decorators (7294)
  • Contractors and supervisors in heavy equipment operator crews (7302)
  • Plasterers, drywall installers and finishers and lathers (7284)
  • Residential and commercial installers and servicers (7441)
  • Heating, refrigeration and air conditioning mechanics (7313)
  • Roofers and shinglers (7291)
  • Iron workers (7236)
  • Transport truck drivers (7511)
  • Construction estimators (2234)
  • Steamfitters, pipefitters and sprinkler system installers (7252)
  • Floor covering installers (7295)
  • Concrete finishers (7282)
  • Bricklayers (7281)
  • Sheet metal workers (7233)
  • Tilesetters (7283)
  • Insulators (7293)
  • Crane operators (7371)
  • Construction inspectors (2264)
  • Heavy-duty equipment mechanics (7312)
  • Construction millwrights and industrial mechanics (7311)
  • Elevator constructors and mechanics (7318) Cabinetmakers (7272)
  • Glaziers (7292)
  • Civil engineers (2131)
  • Drillers and blasters (7372)
  • Telecommunications line and cable workers (7245)
  • Gas fitters (7253)
  • Waterworks and gas maintenance workers (7442)
  • Civil engineering technologists and technicians (2231)
  • Electrical power line and cable workers (7244)
  • Oil and solid fuel heating mechanics (7331)
  • Boilermakers (7234)
  • Water well drillers (7373)

The industry was a moderate performer for the Canadian economy over the past ten years, with output fluctuating significantly. Prior to the recession of 2008-2009, the industry was booming, propelled by substantial growth in non-residential investment, particularly in the energy sector for the development of the oil sands in Alberta, and sizeable growth in residential investment, especially in renovation spending. In 2009, real GDP and employment in the industry were severely impacted by the recession as non-residential and residential investment fell sharply, down by 20% and 7% respectively. The industry quickly recovered in 2010 and posted solid growth until 2014, spurred by substantial increases in capital expenditures on energy projects and mortgage rates at all-time lows. However, the industry’s output fell back in 2015 and 2016, reflecting large declines in non-residential investment, primarily as a result of major investment cutbacks in oil and gas engineering structures due to the sharp decline in crude oil prices and persistent weakness in natural gas prices. Weaker energy prices resulted in delays or cancellations of higher-cost energy projects, ranging from oil sands development in Alberta to the building of liquefied natural gas (LNG) terminals in British Columbia. On average, real GDP in the construction industry grew at annual rate of 1.8% over the period 2007-2016, while employment grew at a faster pace of 2.6% annually, although job creation weakened significantly from 2014 to 2016. Declining productivity reflects the fact that the industry has moved toward smaller firms taking on smaller-scale, less productive projects. It also reflects the fact that the industry is highly labour intensive, employing nearly three times as many workers per unit of output as the average for the entire goods-producing sector.

Over the period 2017-2026, real GDP growth in the construction industry is projected to be similar to the previous decade, as stronger growth in non-residential investment is expected to be accompanied by weaker growth in residential investment. With the gradual recovery anticipated in crude oil prices and positive announcements concerning pipeline projects, investment in oil and gas engineering structures are expected to pick up progressively, contributing to renewed growth in energy-related construction projects. Stronger investment in non-residential building construction and major investments in public infrastructure are also expected to contribute to faster growth in non-residential investment. Indeed, commercial building construction should benefit from rising demand for warehouse space due to the growing adoption of e-commerce (although e-commerce is also expected to restrain demand for retail space, while high office vacancy rates are expected to hold back demand for new office space). Industrial building construction should benefit from the need to boost production capacity, particularly in the manufacturing sector, following a period of under-investment. Institutional building construction and public engineering structures should benefit from the federal government’s infrastructure program ($186 billion over 12 years). This program includes not only spending on typical infrastructure such as roads, highways and other transportation projects, but also spending on “social infrastructure” such as schools, hospitals, cultural buildings, affordable housing, and indigenous and early-childhood facilities. However, growth in construction activity is expected to be restrained by the slower pace of growth projected in residential investment. With rising mortgage rates, stricter mortgage rules, inflated house prices, high consumer debt, and the gradual decline anticipated in household formation, investment in new housing is expected to start declining as soon as 2018, resulting in negative growth for the whole projection period. Ownership transfer costs (associated with the resale of existing houses) are also expected to post negative growth. In contrast, the pace of growth in renovation spending is expected to accelerate, making this sub-component the only source of growth in residential investment over the projection period. Beyond 2020, renovation spending is expected to exceed new housing spending. The resulting pace of growth in real GDP for the whole construction industry is projected to average 1.8% annually over the period 2017-2026, little changed from the previous ten years. Employment growth, however, is projected to weaken substantially, averaging 0.9% per year due to a major turnaround in productivity. Renewed growth in productivity is expected to come from the residential component. Indeed, population aging is expected to lead to a shift in the composition of housing starts from single-unit homes to multiple-dwellings (apartments and condominiums). Because multiple-dwellings are more capital intensive and require less labour by unit of output, productivity is projected to increase markedly in the construction industry.

Real GDP and Employment Growth Rates in Construction

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Construction. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Construction, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 1.8 2.6
2017-2026 1.7 0.9

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).


Date modified: