CALGARY, ALTA.. – Despite a slow market in 2019, a new labour market forecast by BuildForce Canada predicts the coming decade could bring growth to Alberta’s construction industry.
BuildForce’s 2020-2029 Construction and Maintenence Looking Forward report states that a strengthening residential sector in the near term and strengthening non-residential demand over the longer term will create the potential for modest growth over the next decade.
But the forecast warned that given expected industry retirements, this demand may leave the province with a deficit of 23,700 workers by the end of 2029.
BuildForce Canada’s provincial report forecasts employment requirements for both the residential and non-residential sectors to increase by nearly 23,400 workers (+13 per cent) between 2020 and 2029.
BuildForce predicts that over the short term the intensification of near-term work on several petrochemical projects and oil and gas pipeline expansions — including completion of the Canadian portion of Enbridge’s Line 3 in 2019 and the Trans Mountain Pipeline Expansion to 2023 — is expected to maintain non-residential construction employment
While a number of significant new oil and gas projects are being tracked, there are currently no short-term projects included in the outlook. The completion of both the Enbridge and Trans Mountain pipeline projects should help kickstart the construction of a number of new and currently tracked major oil sands investments later in the decade.
“Due to the intense and time-sensitive nature of industrial shutdown and turnaround maintenance work, seasonal recruiting challenges may arise,” said Bill Ferreira, executive director of BuildForce Canada. “We expect labour force requirements in both 2020 and 2021 to be higher than normal.”
These projects can create periods of seasonal labour force tightness, as many of the skilled trades required for maintenance are in high demand. BuildForce also predicts that the province could run into recruitment challenges as other provinces with their own labour shortages, like B.C. and Ontario, compete for skilled labour.
Ongoing road, highway, and bridge work and major planned public transportation investments in both Calgary and Edmonton are also expected to sustain non-residential construction, although scope and scheduling details for some of these projects are still uncertain. Several large office tower projects are expected wrap up in 2020, even as near-term office vacancy rates rise. BuildForce noted that cautious government spending should moderate investment in institutional buildings in 2020 and 2021.
From 2020 to 2029, BuildForce anticipates that non-residential construction activity will require the industry to increase employment by more than 14,700 workers, with the most crucial period between 2023 and 2027.
While 2019 saw weaker market conditions due to declines in new-housing construction, BuildForce expects a modest recovery in housing starts and increased renovation activity to balance the residential labour market by next year. The residential sector is expected to add just over 8,700 residential workers (+12 per cent) by 2029, spurred on by a moderate strengthening in new-housing demands, with rising renovation activity projected to contribute nearly 2,700 workers to that total.
“In the first two quarters of 2019, Alberta led the country in terms of population growth, boosted by both natural growth as well as international and interprovincial migration,” said Ferreira. “This rise in the population should translate into greater demand for construction services in the latter half of our outlook, particularly for housing and commercial and institutional buildings.”
The population increase should also help soften the impact of retirements on the province’s construction labour force, which is expected to lose 41,500 workers to retirement over the decade while only drawing in an estimated 40,300 local new entrants aged 30 and younger over the same period. When coupled with the rise in demand for construction services, the provincial labour force may be short 23,700 workers by 2029.
BuildForce emphasized that skilled tradespersons jobs offer a particular challenge as developing them can take years and often requires participation in a provincial apprenticeship program. From 2013 to 2019, more than 84,200 apprentices registered in Alberta’s 19 largest construction trade programs, with 40,260 completions reported during that period. BuildForce Canada is beginning to track the number of skilled trades workers with Certificates of Qualifications.
Based on current apprenticeship completion trends and anticipated retirement levels throughout the decade, several trades may see a reduction in the number of certified journeypersons. BuildForce found that boilermakers and carpenters are at a higher risk. BuildForce noted that although apprentices alone cannot meet the significant near-term demand requirements for journeypersons, an ongoing commitment to training and apprenticeship development will be necessary to ensure there are sufficient numbers of qualified tradespeople to sustain a skilled workforce over the long term.
Successfully filling the labour gap will also require the construction and maintenance industry to rely on increased recruitment from groups traditionally underrepresented in the current construction labour force, including women, Indigenous people, and new Canadians.
In 2019, Alberta’s construction industry employed approximately 38,200 women, of which 33 per cent held on-site jobs, directly on construction projects. Although Alberta is the leading employer of women within the construction trades (slightly ahead of British Columbia), women made up only 6.8 per cent of the 183,500 tradespeople employed in the industry.
Similarly, Indigenous people also represented a small percentage of the construction labour force, accounting for approximately 6.4 per cent of the total. BuildForce stated that increasing the participation rate of both these groups would go a long way to help the Alberta industry address future labour force needs.
The province’s construction workforce is made up of approximately 17 per cent new Canadians. BuildForce noted that over the coming decade, the province is expected to welcome a net annual average of 36,000 newcomers, making the immigrant population an important future source of potential workers for the province’s construction and maintenance industry.