Subdued construction demand anticipated for Ontario into 2021: report

NEW YORK CITY—Turner & Townsend has released a new supplemental report to its annual Canada Construction Market Intelligence report.

The report noted that while Canada and the rest of the world continue the fight to flatten the curve, economic recovery remains slow. The future is unpredictable, the report argued, but with its strong economic and political fundamentals, Canada should head into the uncertainty in a position of strength relative to other countries.

The Canada market intelligence report provides an analysis of Canada’s construction economy on a province-by-province basis.

In Ontario, construction activity continues to drive the economic recovery. Both the Ottawa and Toronto markets remain strong, fuelled by strong investment in residential and infrastructure projects. This is tempered to some extent by a slow-down in some investment decisions on commercial developments, as investor-developers wait and see what the long-term impact of working from home will have on the corporate real estate market.

“Despite Ontario’s cautious region-by-region approach to reopening its economy, we anticipate strong third-quarter growth results, as pent-up demand accumulated in the second quarter was unleashed. However, with rising infections in recent weeks, it remains to be seen how consumer confidence will be impacted.”

Turner & Townsend said it anticipates a more subdued pace starting in the fourth quarter and into the first two quarters of 2021.

Housing starts in Ontario have increased by almost 20 per cent year-over-year when compared to 2019. That is in contrast to the outlook for the hospitality sector which continues to reel from lower restaurant and hotel room bookings, the report stated.

“Productivity on construction sites continues to be a major focus as construction workers continue to adopt social distancing practices,” the report said. “A recent study by the Sheet Metal and Air Conditioning Contractors National Association found that approximately 8.7 per cent of hours available on projects to do productive work are lost due to mitigation requirements such as PPE management, cleaning and disinfection, access restrictions and extra administration time.”