Labour shortages still a concern for industrial, commercial and institutional construction contractors, survey finds
Ontario’s industrial, commercial and institutional (ICI) construction contractors remain positive about their fortunes in 2012, although less so than recent years, and labour shortages are a growing concern, according to a recent survey.
The Ontario Construction Secretariat (OCS) recently conducted the survey which found that only 18 per cent of contractors in the province expect an increase in the availability of skilled construction workers, versus 26 per cent who expect their availability to decline. This opinion was particularly extreme in Northern and Eastern Ontario, where work expectations are the highest.
Ontario could be short 100,000 skilled workers by 2019, indicates the Construction Sector Council, said Sean Strickland, chief executive officer of the OCS.
“With many exciting projects on the horizon, it is not a surprise that our contractors are concerned about the pool of labour that is available to them,” he said.
Boilermakers, construction managers, gasfitters, industrial instrument technicians, pipefitters and welders are projected to be scarce over the next few years.
Strickland was speaking at the recent 12th Annual OCS State of the Industry and Outlook Conference.
The survey of 500 non-residential ICI contractors conducted by Ipsos-Reid for the OCS shows that one-third of contractors expect to conduct more business in 2012, higher than the 14 per cent that expect to conduct less business, but lower than the number in 2011’s survey.
“We’re working with a relatively stable economy, weakening institutional investment, modest commercial growth and strengthening industrial investment,” Katherine Jacobs, the OCS’s director of research and analysis, told delegates to the conference.
The survey indicated that work expectations were strongest in northern Ontario, largely because of the booming mining industry. Nearly 80 per cent of those contractors rated the current economic situation as “good.” About $5 billion in investment is slated for the region soon, Jacobs said.
Like in recent years, contractors in the Greater Toronto Area and central Ontario expect to do most work in the commercial sector (particularly office and retail) in 2012. The two regions comprise roughly 75 per cent of the province’s total commercial market, she said.
Trade scarcities are expected to rise in those two regions partly because of public transit developments (in Ottawa and Toronto), infrastructure development, the 2015 Pan Am Games, nuclear refurbishing and green energy projects.
Contractors, particularly in central and southwestern regions, expect slightly less net business in the industrial sector – the first time since the 2009 recession, Jacobs added. Hard hit are new factory/plant and warehouse startups.
Throughout the province, the non-unionized sector is slightly more positive than the unionized side although optimism in both sectors is down from previous years, the survey found.
The OCS measures contractor perceptions of business conditions through its “construction barometer” which rates expectations on a scale of zero to 100. A reading above 50 indicates contractors expecting to do more business outnumber those expecting to do less, said Jacobs.
The 2012 barometer measured 57, revealing that contractors are - on balance - expecting more work in 2012, she said. However, continuing last year’s trend, contractors are less positive about work prospects compared to the previous year, making it the second straight year that the barometer has declined.
The OCS’s keynote speaker, Douglas Porter, told conference delegates he is cautiously optimistic about the economic fortunes of the province and sees a “modest recovery,” largely because of government restraint measures.
The building industry will shift away from public sector spending to the private sector, said Porter, CFA, deputy chief economist and managing director of BMO Capital Markets.
He added the private sector has continued to take up some of the slack where government capital spending on non-residential construction projects in Ontario has tailed off.
On a steady upswing, construction employment is at 6.5 per cent of total employment in Ontario, he said.