Construction woes: Contractors soft on growth in 2016

Contractors in Northern Ontario aren’t expecting a flurry of activity across the region this year.

A provincewide contractor survey, released March 8 by Ipsos Reid and the Ontario Construction Secretariat, indicates firms in the North expressed the least optimism in their economic outlook for the upcoming building season.

Just over half the firms in this region expect to see business decline in 2016.

Overall, the Ontario construction industry is cautiously optimistic with 31 per cent of contractors expecting to see business growth and 52 per cent expecting the status quo.

The findings are contained in the annual Construction Confidence Indicator that reveals contractors' perceptions of business conditions for the next 12 months.

Findings from the provincewide survey also indicate only a small minority of construction firms – six per cent – expect to "benefit greatly" from the federal government's $125-billion infrastructure spending plan.

"Ontario's construction economy is a regional patchwork of diverse and changing business opportunities," said Sean Strickland, CEO of the Ontario Construction Secretariat, in a news release.

“It’s critical that firms have timely information that helps them grow their business and anticipate skilled labour needs. This includes a more clear and substantive conversation with federal and provincial governments about how firms can make the most of infrastructure dollars in the future."

Strickland added the industry has been on a downward trend since rebounding from the 2009 recession, “which clearly speaks to the current state of the economy.”

Detailed geographic data collected for the first time by the OCS suggest certain regional economies and cities will significantly outpace others. Firms in London, Ont., expressed the greatest increase in confidence over 2015, surpassing last year's most confident contractors in the GTA.

The residential sector is expected to lead growth in the GTA and Niagara Region, while the institutional and engineering sectors are expected to lead growth in Ottawa and Niagara.

Increasing confidence in manufacturing is adding momentum for construction in the industrial sector, particularly in Windsor and Sarnia.

The Ontario Construction Secretariat is a partnership of 25 building trade unions and signatory contractors in the industrial, commercial and institutional sectors.