construction confidence indicator

Ontario contractors expect growth in 2017: survey

Thursday, March 16, 2017

Ontario’s construction industry has a positive economic outlook for 2017 and confidence is up, according to the results of the Ontario Construction Secretariat (OCS)’s annual survey, the Construction Confidence Indicator. With a score of 60 out of 100, this year’s survey found that a majority of Ontario’s construction firms expect more business this year than in 2016.

“Increased construction activity is always a good sign for the overall economy and things are decidedly looking better for Ontario in 2017,” said Sean Strickland, CEO of the OCS, in a press release. “We’re seeing a couple of possible explanations for the boost in optimism like investments in major infrastructure projects across the province and an improved economy south of the border.”

According to regional data, Central Ontario had the highest confidence score of 62, followed by the GTA with a score of 61. Northern Ontario respondents had the lowest confidence rating in the province at 57, however optimism has still improved since 2016. Significant investment is being made at some of Northern Ontario’s post-secondary education facilities, including projects at Laurentian University, Canadore and Confederation College.

“Ontario’s economy beat the national average increase in real GDP growth in both 2015 and 2016 and we expect 2017 will mark the year Ontario was the fastest-growing province,” said Dawn Desjardins, deputy chief economist at RBC. “Fiscal stimulus and consumer spending will be key supports in 2017 and will likely lead business to pick up the pace of investment activity as the year progresses.”

The Construction Confidence Indicator analyzes growth expectations across five construction sectors: industrial, commercial, engineering/civil, institutional and high-rise residential. Results show that across the province in the non-residential sector, contractors expect to see the most growth in engineering/civil projects with 43 per cent of respondents expecting significant growth in 2017. Expectations for significant growth in this sector are highest in Eastern Ontario (57 per cent).

Contractors expect the high-rise residential sector to perform better in 2017. Across Ontario, 45 per cent of contractors expect significant growth in this sector. In Kitchener-Waterloo, 63 per cent of those surveyed anticipating significant growth, likely due to the construction of a new light-rail transit system in the region.

Despite the boost in overall confidence, almost half of the 500 contractors surveyed say they expect the Trump Presidency to have a negative effect on Ontario’s economy and the construction industry. This feeling was most common in Windsor-Sarnia, where 59 per cent of contractors believe President Trump’s government will negatively impact Ontario’s economy.

In Hamilton-Niagara, however, 40 per cent of firms say they expect the Trump Presidency will have a positive impact on the province’s economy, while 44 per cent predict negative effects. Three areas of concern include increased costs on construction materials, negative impact on the manufacturing industry and decreased investment in projects due to economic uncertainty.

Another subject of the Construction Confidence Indicator is employment trends. According to the survey, there has been an 11 per cent increase in apprenticeship employment in the unionized construction sector over the past two years, but in the non-unionized sector, there was only a three per cent increase over the last two years. Eighty-three per cent of unionized firms employ apprentices, while only 49 per cent of non-unionized firms do the same.

More information about the Construction Confidence Indicator can be found at http://iciconstruction.com/2016/11/03/state-of-the-industry-outlook-conference-2017/.

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