CANADIAN REPORT FORECASTS MODERATE ESCALATION FOR ON, BC AND QC IN 2021; AND LOW ESCALATION FOR PRAIRIES AND THE ATLANTIC PROVINCES
TORONTO, Dec. 29, 2020 /CNW/ - BTY is pleased to release its 17th annual Market Intelligence Report (MIR) for the construction industry across Canada, including market snapshots for the U.S., the U.K., Ireland, Turkey and the EECA. The firm expects recovery efforts and accelerated trends from 2020 will spur investment opportunities in best positioned markets and sectors in the New Year.
The MIR forecasts projected construction cost escalation in Canada, and provides insight on trends, market and sector drivers and drags, and innovations on building strategies, materials and techniques.
The escalation forecast for 2021 projects moderate escalation of 3% to 5% in Ontario, British Columbia, and Quebec, with low escalation in Alberta (1% to 3%), Saskatchewan (0% to 2%), Manitoba (1% to 3%), and the Atlantic Provinces (0% to 2%).
The continuing impacts of COVID-19 on construction are being felt unevenly by province as well as sector, creating a mixed economic outlook across the country. While the residential forecast grew strongly in late 2020, uncertainty remains about longer-term expansion given the sharp drop in immigration and reduced foreign direct investment due to the pandemic.
Infrastructure, renewable energy and industrial building are forecast to be the top performing sectors, with mega projects in BC, Quebec and Ontario counterbalancing declines in commercial and leisure sectors. Investment in renewable energy is the bright spot in Alberta, which, like most provinces, is also increasing investment in infrastructure to boost the economies.
"The construction industry's ability to rally after pandemic lockdowns and return to work safely reflects the resilience and adaptability it has shown through past crises and economic downturns," says Managing Director Toby Mallinder.
"In the longer term, we are expecting changes driven by COVID-19 – especially in technology – to accelerate improved productivity. Achieving – and surpassing – pre-2020 construction activity levels still depends on a robust economic recovery supported by a speedy, successful and sustained vaccine rollout."
With Canada's economic growth forecast projected to return to positive territory in 2021, the overall outlook for construction remains favourable, albeit with some regional variation. Here is a province-by-province summary:
Ontario: An already robust infrastructure program – bolstered by increased government stimulus spending – will help offset sharp declines in commercial building and a projected dip in housing starts.
British Columbia: Mega energy projects, a long roster of major infrastructure projects and government stimulus spending will keep BC construction buoyant.
Alberta: The second sharpest economic contraction among provinces will prolong the return of construction to pre-2020 levels. The bright spot is rapidly growing private sector investment in renewables.
Saskatchewan: Continuing weakness in the energy and mineral mining sectors are slowing recovery, but booming agri-food production and exports will help the Province weather the storm until recovery takes hold.
Manitoba: Manitoba – expected to experience the least economic impact from COVID-19 – will still see construction declines across the board despite new government infrastructure spending.
Quebec: With multiple major transportation projects underway, supported by added government investment in infrastructure, the non-residential sector should soon return to pre-2020 levels. Residential recovery may take longer to gain momentum but remains one of the hottest markets in the country.
Atlantic Canada: Buoyed by major capital spending, Nova Scotia and New Brunswick will bounce back stronger and faster than Prince Edward Island and Newfoundland and Labrador. Slow – and even negative population growth – will be an added drag.
BTY Group has been publishing its annual industry review of construction cost forecasts across Canada since 2003. Over the years, the Market Intelligence Report has earned a reputation in the property, infrastructure and finance communities for crucial insights on factors behind the changing marketplace and reliable unit rate cost projections for the coming year.
A full copy of the report can be accessed on our website at www.bty.com/from-lockdowns-to-locking-in-for-recovery/
BTY is an award-winning professional consultancy providing complete project solutions in real estate and infrastructure asset planning, development, operations and transactions. Established in 1978, the privately owned firm's offices are based in the Americas, Europe and the Middle East, with a multi-sector global portfolio of projects valued at over $100 billion. BTY's core services include Infrastructure Advisory, Project Management, Project Monitoring and Cost Management, supported by proprietary data and digital technology solutions.
SOURCE BTY Group