Renewed residential activity and ongoing work on major non-residential projects elevate construction demands to 2034

/EIN News/ -- OTTAWA, Ontario, April 04, 2025 (GLOBE NEWSWIRE) -- Construction investment levels increased modestly across Canada in 2024, with both the residential and non-residential sectors reporting growth.

Activity in the residential sector has been declining since reaching a peak in 2021. Since then, pressures from rising interest rates and concerns over housing affordability have contracted investment levels, and investment levels in new housing in particular significantly. Last year saw the sector return to growth. Although new-housing investment levels contracted again, this loss was offset by a gain in residential renovations.

Investment levels in non-residential construction, meanwhile, have trended upwards since 2021, and recorded another gain in 2024. This latest increase was driven by growth in the construction of industrial, commercial, and institutional (ICI) buildings, as most provinces reported a significant volume of construction underway on projects across their respective healthcare and education sectors. Investment in engineering construction, on the other hand, contracted slightly as several major projects passed peak activity levels.

BuildForce Canada released its 2025–2034 Construction and Maintenance Looking Forward national forecast today. The outlook calls for investment activity to record growth to the end of the forecast period.

After remaining largely unchanged in 2025, investment in the residential sector is projected to chart a steady series of increases from 2026 to 2034. Activity is driven initially by strong demand for new-housing construction as interest rate pressures ease, and pent-up demand brings consumers back to the market. Although later years see new-housing construction growth slow, investment growth is projected to be driven by strong levels of activity in residential renovations.

Non-residential construction investment is projected to ebb and flow across the forecast period, in line with the timing of current and proposed major projects. Levels are projected to rise to a forecast peak in 2027 with the culmination of works on projects across the engineering construction sector (including transit projects in Ontario and British Columbia, and utility projects in New Brunswick, Nova Scotia, Ontario, and British Columbia) and the ICI buildings construction sector (including healthcare and education projects across the country, and stronger growth in commercial building). Investment slows into 2030 before increasing in line with population demands and economic growth to the end of the forecast period.

These trends combine to elevate employment across the forecast period. Residential-sector employment is projected to increase by 6% above 2024 levels by 2034, with gains concentrated in the renovations and maintenance sub-components. Non-residential employment is projected to rise by approximately 8% above 2024 levels by the end of the decade. Gains are greatest in ICI buildings (17%) and maintenance activity (12%), while employment relating engineering construction is mostly sustained at elevated levels.

It is important to note that the investment trends and employment projections presented in this scenario were developed with industry input prior to the emergence of potential trade tensions between Canada and the United States. This forecast therefore does not take into account the possible application of tariffs on Canadian exports to and imports from the United States, nor does it account for any resulting changes in trading patterns between Canada and its other key trading partners.

“Construction is a key contributor to Canada’s economic output, accounting for 7% of our national gross domestic product, and employing 1.6 million people, or about one in every 13 working Canadians,” says Sean Strickland, Chair of BuildForce Canada. “While our industry has been successful in recent years with promoting careers in construction to key demographics such as women and young people, we cannot ignore the labour force pressures that are being created by not only growing demand for construction activity across the country, but also the imminent retirement of a large number of older, experienced workers.”

Although overall labour market pressures eased in 2023 as residential construction demands slowed, market conditions tightened again in 2024 as residential-sector investment returned to growth. Market conditions among non-residential construction trades and occupations remained at an elevated level in 2024, given strong levels of activity throughout Atlantic Canada, in Ontario, across most of the Prairie provinces, and in British Columbia.

“A projected return to growth in the residential construction sector in 2025 will create further demands on the construction labour force into the late 2020s,” says Bill Ferreira, Executive Director of BuildForce Canada. “Growth is expected to be slow initially as buyers return to the market and excess supply is absorbed, but later years see growth accelerate in response to pent-up demands. Meanwhile, market conditions for most trades and occupations in the non-residential sector are expected to remain strained in the near term, given the volume of projects underway across the country.”

Strong residential demands spur growth across the provinces; non-residential activity is influenced by major project demands
All four Atlantic provinces reported increases in overall construction activity in 2024, with growth in their respective residential and non-residential sectors.

The outlook calls for the provinces’ residential sectors to record growth into 2034:

• In Prince Edward Island, activity rises significantly into 2030 before slowing to the end of the decade.
• Nova Scotia is expected to see investment levels sustained between 2025 and 2027 before recording a series of increases to the end of the decade.
• The outlook for New Brunswick calls for a notable slow down in investment through to 2029 before levels rise to 2034.
• Newfoundland and Labrador is projected to see muted gains.

The non-residential outlook for Atlantic Canada sees growth driven by major projects in three of the four provinces.

• In Newfoundland and Labrador, growth is driven initially by ongoing work in both engineering construction and in the construction of ICI buildings; later years see engineering construction rise significantly with the start of work on the proposed Bay du Nord offshore oil development project.
• In Nova Scotia, investment recedes in the short term with the completion of several projects, but is then elevated notably between 2027 and 2030 with work on the EverWind hydrogen project.
• The outlook for New Brunswick is similar, with several projects concluding in the early term before investment rises significantly with increased activity at the Mactaquac Life Achievement Project and the proposed Irving Pulp & Paper NextGen capital improvement project.
• Prince Edward Island sees investment step down from its 2024 peak with reduced activity in ICI buildings construction and, after 2026, slowing growth in engineering construction activity.

In Quebec, investment levels are expected to stabilize across the residential and non-residential sectors after operating at elevated levels for some time. In the residential sector, housing starts are projected to decline across the forecast period, with contractions greatest among multi-unit dwellings. This trend is offset by steady growth in residential renovations. Activity in the non-residential sector is projected to remain elevated over the near term before generally trending downward into the early 2030s as work is completed or passes peak construction activity on several major utility, transit, healthcare, and education sector projects.

Construction investment levels in Ontario are projected to rise to the end of the forecast period. Residential construction activity is projected to slow in 2025 before rising steadily in all of the remaining years of the forecast. Gains are driven by several factors, including pent-up consumer demand, easing interest rates, and a growing population. The outlook in the non-residential sector calls for activity to rise to a peak in 2027, driven by a wide range of ongoing and new major projects. Investment slows into 2030 before being sustained at an elevated level to the end of the decade.

In Manitoba, investment levels in both sectors are projected to increase steadily across the forecast period. The residential sector is expected to benefit from lowering interest rates and positive population growth. The non-residential sector is expected to benefit from growth in both components. Utilities projects and works on roads, highways, and bridges drive growth in engineering construction, while growth in ICI buildings construction is driven across all three sub-components.

The outlook calls for Saskatchewan’s residential construction sector to grow steadily across the forecast period. Demand for new housing increases in response to a young and growing population, while renovation growth is more modest, given the province’s comparatively newer housing stock. Although the outlook for the province’s non-residential sector calls for contractions, levels remain elevated by historical standards, supported by work on major projects such as the second phase of the BHP Jansen Potash Mine Development, and across the manufacturing, healthcare, and education sectors.

Investment levels in Alberta are projected to grow across the forecast period. The residential sector is propelled by strong short-term growth in new-housing construction. Later years see strong demand for residential renovations and maintenance activity. Investment in the non-residential sector, meanwhile, is projected to stabilize through the near term as work on several major engineering-construction projects passes peak activity levels or concludes. This trend is mostly offset by further increased levels of construction of ICI buildings. In later years, growth is driven by strong gains in the construction of ICI buildings.

Finally, the outlook scenario for British Columbia calls for a modest increase in residential activity to offset a small contraction in non-residential activity. The former sees contractions in new housing activity through to 2031 as population growth slows. These contractions, however, are offset by growth in renovation investment. Investment levels in the non-residential sector are projected to ebb and flow through the forecast’s short-term period, in line with high levels of ICI buildings construction and with the timing of work on major engineering construction projects. Growth moderates into 2031 as projects pass peak construction and end.

“Construction is at or near peak activity levels in almost every region of the country. This means that not only are provincial labour forces dealing with their own challenges when it comes to retirements and the recruitment of new workers, but workforce mobility is also less likely, given the volume of projects in nearly all regions of the country,” says Warren Douglas, Vice-Chair of BuildForce Canada. “These labour market pressures are complicated by Canada’s demographics challenge. The BuildForce Canada outlook projects that nearly 270,000 experienced construction workers, or one-fifth of the 2024 labour force, will exit the industry through retirement in the next 10 years. It takes time for newer workers to acquire the skills and experience of older workers, which means knowledge transfer and mentorship will be critical to ensure the industry does not suffer a skills gap during this transition.”

Recruiting successes in 2024 must be sustained – and complemented with further efforts to diversify the labour force
Meeting the industry’s near- and long-term labour market demand requirements will require a combination of strategies that include increasing the recruitment and training of youth, and looking to traditionally under-represented groups, such as women, Indigenous People, and newcomers to Canada, or to other industries, to augment the available pool of local workers.

Growth in construction demands over the forecast period is projected to require the labour force to expand by 111,600 workers. When this growth is added to projected retirements, the industry’s overall hiring requirement rises to 380,500 workers by 2034.

Based on historical trends, much of this requirement can be met by the expected recruitment of approximately 272,200 new entrant workers under the age of 30 during this period. However, even at these heightened levels of recruitment, the industry may face a shortage of as many as 108,300 workers by 2034.

“Construction enjoyed good success at recruiting new workers from among two key demographic groups in 2024: young people and women. Employment in the industry among workers aged 15 to 24 years grew by 19% last year, while it rose by 5% among women of all ages. Both increases compare favourably to the overall employment increase of 1.8% seen in the industry last year,” says Strickland. “Our efforts now should be focused on building on these successes, and bringing in more workers from other traditionally under-represented groups, including Indigenous People and newcomers to Canada.”

In 2023, there were approximately 217,700 women employed in Canada’s construction industry. That figure represented an increase of nearly 7,000 workers from 2022. Of them, 29% worked directly in on-site construction. However, as a share of the total 1.21 million tradespeople employed in the industry, women accounted for just 5% of the on-site construction workforce.

The Indigenous population is another under-represented group that presents recruitment opportunities. In 2023, Indigenous People accounted for 5.2% of Canada’s construction labour force, which is a slight increase from the 4.4% observed in 2014, and is notably higher than the 3.9% represented in the overall labour force. As the Indigenous population continues to grow, the sector must continue to work with Indigenous communities to promote career opportunities to their youth and invest in initiatives that foster long-term retention and a welcoming workplace environment where they can build fulfilling careers.

The construction industry may also leverage newcomers over the coming decade to meet anticipated labour market requirements. Based on current trends and adjusted federal immigration targets, Canada is expected to welcome nearly 4.4 million new immigrants between 2025 and 2034. This will make newcomers a key contributor to the industry’s labour force. In 2023, newcomers comprised about 20% of the total construction labour force nationally. That figure is notably lower than the share (27%) in the country’s overall labour force.

Increasing the participation rate of women, Indigenous People, and newcomers will be critical in helping Canada’s construction industry address its future labour force needs.

BuildForce Canada is a national industry-led organization that represents all sectors of Canada’s construction industry. Its mandate is to support the labour market development needs of the construction and maintenance industry. As part of these activities, BuildForce works with key industry stakeholders, including contractors, proponents of construction, labour providers, governments, and training providers to identify both demand and supply trends that will impact labour force capacity in the sector, and supports the career searches of job seekers wanting to work in the industry. BuildForce also leads programs and initiatives that support workforce upskilling, workforce productivity improvements, improvements to training modalities, human resource tools to support the adoption of industry best practices, as well as other value-added initiatives focused on supporting the industry’s labour force development needs. Visit www.buildforce.ca.

For further information, contact:

Bill Ferreira
Executive Director
BuildForce Canada
ferreira@buildforce.ca
613-569-5552 ext. 2220

Sean Strickland
Chair
BuildForce Canada
613-236-0653

Warren Douglas
Vice-Chair
BuildForce Canada
306-352-7909