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SCA president optimistic despite large construction job drop

Warren Frey
SCA president optimistic despite large construction job drop

Saskatchewan’s construction economy is slowing down but there’s also cause for optimism, according to one industry leader.

Saskatchewan Construction Association (SCA) president Mark Cooper said the drop in construction jobs is related to the economy as a whole. He stated since 2015, 14,000 jobs have been lost in the industry.

“The core of it is we have a slower economy. It’s still growing but at a slower pace, and that has implications in terms of job losses for construction,” Cooper said.

But while job numbers are down, they are still higher than levels from the previous decade, he added.

“We’re down from the peak and we’re slower than we were at the peak, but we had around 35,000 people working construction a decade ago and we have about 53,000 now,” he said.

“We have less work than we did five years ago, but that wasn’t a sustainable level of activity.”

What drove those levels of construction, he said, were several major projects all coming online in close proximity to one another and then reaching completion, such as Regina’s new football stadium, new hospitals in Moose Jaw and North Battleford, and a children’s hospital in Saskatoon.

“We had several projects come online at the same time over a decade. Mines, schools, a stadium…all of these projects required a large number of jobs to get the work done. As those drew down, demand decreased,” Cooper said.

“We had a perfect storm. While it’s disheartening, the current situation is a better view of what we should expect. It’s not ‘the sky is falling’ by any stretch.”

Saskatchewan was also hit with a serious drop in demand for several commodities including oil, potash and uranium, resulting in less construction jobs.

“When they stop building and investing in projects, that results in less work for construction,” Cooper said, noting the commercial and industrial sectors don’t face the same barriers.

In the residential sector, additional regulatory hurdles have also led to a slowdown, he noted.

“Regulations are more of a challenge for residential, due to tightening mortgage regulations at the federal level and property taxes at the municipal level. A negative impact on the residential sector affects us all, and we stand with our residential partners to support regulations that encourage investment,” Cooper said.

With clarification on economic and political fronts, Cooper added, the prospects for more construction jobs will improve.

“It’s the lack of clarity that makes it challenging for investors. It’s obviously better if we build a pipeline than if we don’t, but the uncertainty is what’s most challenging,” he said.

Cooper added other factors such as American steel tariffs and a challenging trade environment in China throws the province’s future relationship with those countries into question.

“People in the private sector are holding onto their money and waiting to see how things unfold politically at a global, federal and even at a provincial level,” he said.

“Saskatchewan is a province that exports more than any other province internationally, in terms of uranium, potash, oil, natural gas and agriculture, so we rely on international trade.”

A recent decision by the Government of Saskatchewan to introduce prompt payment legislation will also help create investment certainty, he said.

“I don’t think it’ll hinder any ethical action, but what it will do is help managers to guide their cash flow and investments,” Cooper said.

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