Skip to Content

View site list



Outlook for construction hiring in Canada is brighter heading into 2018

John Clinkard
Outlook for construction hiring in Canada is brighter heading into 2018

The fact that Canada’s unemployment rate hit its lowest level in almost 9 years in July is a very good indication that the economy is expanding at a healthy pace as it approaches the final quarter of 2017. Over the past year, 387,000 jobs have been added, the largest twelve-month gain in just under ten years. Moreover, almost all (90%) of the jobs added were full time and the majority 221,000 were in the private sector. Across major industrial categories, the bulk (79%) of the jobs added were in the service sector due to gains in retail and wholesale trade, professional services and public administration.

Employment in goods-producing industries rose by 81,000 over the past twelve months, largely on account of gains in manufacturing (+53,000) and construction (+26,100).

According to Statistics Canada’s Establishment Employment Survey, total construction jobs in Canada year to date have risen by 1.7%. This increase has been largely driven by a 5.2% rebound in engineering construction jobs (they declined by 6.9% in 2016) together with a 2.5% rise in hiring by residential contractors and a 1.0% increase in non-residential employment.

From a regional perspective, over the past twelve months, construction employment has risen in seven of the ten provinces led by British Columbia (+20,000), Quebec (+11,000) and Ontario (+7,000). "De-fuelled" in large part by the lingering impact of the sharp drop in energy investment following the collapse of oil prices in 2014, construction employment in Alberta, Newfoundland/Labrador and Nova Scotia has contracted by -20,000, -2,100 and -700 jobs respectively since July of 2016.

Consistent with the positive outlook for the global economy in general and for the U.S. economy in particular, we expect construction hiring at the national level to remain solidly in positive territory over the near term. This observation is based on several key forward-looking indicators of overall business investment and specifically of construction activity.

Regarding the overall outlook for business investment, after-tax corporate profits, a key driver of investment, posted solid double-digit year-over-year increases in the final quarter of 2016 and the first quarter of this year. Second, according to the most recent Bank of Canada Business Outlook Survey, the percentage of firms planning to boost their investment spending over the next twelve months stood at 29% in the second quarter of this year, only slightly below the ten-year high it reached in the first quarter. Third, business investment intentions, reflected by the S&P/TSX Composite Index, has averaged above 15,000 for the past eight months and remains close to the record high of 15,922 it reached in February of this year.

Turning to the more specific indicators of construction employment, the construction job vacancy rate for Canada, currently at a two-year high, has been trending steadily upward since the beginning of 2016. Second, despite a slight retreat in July, the Canadian Federation of Independent Business’ Construction Business Barometer stood at 60.7 in July, its second strongest showing since January of 2014. Finally, the total value of building approvals in Canada has increased by 9% year to date almost entirely due to a 13.4% increase in the value of residential building approvals. This significant rise suggests that demand for residential building trades will remain strong well into 2018.

Given that Ontario accounts for two-thirds of the planned increase in construction intentions, demand for both residential and non-residential building trades should remain strong in the province over the near term. In addition, construction employment in Quebec should get a boost from the recent strength in the value of residential and non-res building permits while a 9.6% year-to-date increase in residential permits should underpin construction hiring in British Columbia.

Over the longer-term, the outlook for construction employment in British Columbia and Alberta is overshadowed by the relatively hostile climate for resource investment in both provinces. In addition, the recent broadening of rent controls combined with a planned 27% increase in the minimum wage will likely exert a drag on construction hiring in Ontario.

Recent Comments

comments for this post are closed

You might also like