49
Construction and Maintenance Looking Forward Alberta An Assessment of Construction Labour Markets from 2014–2023
| Date post: | 18-Dec-2015 |
| Category: |
Documents |
| Upload: | marion-thompson |
| View: | 222 times |
| Download: | 5 times |
Construction and MaintenanceLooking ForwardAlberta
An Assessment of Construction Labour Markets from
2014–2023
Construction and Maintenance Looking ForwardAlberta
Contents Introduction and highlights Economic environment and investment outlook Construction labour requirements The available workforce Market rankings and mobility Conclusion
Note: Definitions, methodology and detailed tables are available at www.constructionforecasts.ca.
Introduction
Construction and Maintenance Looking Forward 2014–2023 Reports on the state of construction labour markets in Alberta from 2014 to
2023 are based on:– a current macroeconomic and demographic scenario– scenario for construction and maintenance spending in residential and
non-residential sectors– a current inventory of major construction projects– the views and input of provincial labour market information (LMI)
committees The BuildForce labour market model covers 33 trades and occupations:
“The BuildForce construction workforce.” This group includes on-site workers – 75 percent of the full construction
workforce.– Statistical reliability is limited by small populations in some provinces, but in
Alberta, all 33 trades and occupations are covered.
Highlights
Recent cycle: 2007–2012 By 2007, employment had almost doubled its historical levels. Job losses in 2009 marked an abrupt interruption to the accelerating growth
in Alberta construction employment that began in 1997. More than 10 years of accelerating growth had reduced unemployment to
record low levels and recruiting from outside of Alberta became standard procedure.
From 2007 to 2009, employment declined by 13 percent, but then recovered by 20 percent between 2009 and 2012.
Since 2009, unemployment had approached more normal levels, but remained below historical values and recruiting from out of the province had resumed.
A rising proportion of the arriving workforce were “non-resident” employees (i.e., not permanent residents).
Highlights
2013 Growth continued in 2013, but at slower rates:
– housing, commercial and industrial activity was rising– some major engineering projects were winding down
Employment was up – mostly in residential – with total gains below recent annual averages.
Unemployment remained very low and out-of-province recruiting continued. Calgary floods set up late-year shifts in activity with large emerging
requirements.
Highlights
2014–2023 Project announcements and flood damage add to the demand requirements
into 2014 and 2015. A residential cycle causes home building to weaken from 2016 to 2019. Oil sands projects lead a surge in non-residential investment from 2014 to
2019. As the oil sands industry matures and capacity grows larger, employment
shifts from new capital projects to increased ongoing maintenance work and sustaining capital projects over the long term.
Housing revives and oil sands work eases off after 2020. There are very limited opportunities for local workforce mobility within the
province. Recruiting from out of the province continues near record levels until 2020
and in-mobility is divided between non-resident employment and permanent additions to the workforce.
Economic environment
Canada Canada’s economic growth is forecast to be relatively stable over the next 10
years, averaging 2.2 percent annual growth. Strong private investment will remain instrumental to the country’s growth, as
relatively lower commodity prices and sluggish economic recovery across Canada and the rest of the world constrains growth.
The attempts of the federal and provincial governments to reduce their deficits will slow government spending.
Short and long-term interest rates remained low in 2013, reflecting the need to keep the recovery going, but are expected to rise subsequently as the Federal Reserve Board and the Bank of Canada react to potential higher inflation.
The Canada-U.S. exchange rate is expected to remain strong in the short term, but fall toward its underlying value over the scenario period.
Canada and U.S. 3-month treasury bill rates (%)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
0
1
2
3
4
5
6
7
Canada 3-month t-bill rate (%) U.S. 3-month t-bill rate (%)
Forecast
Source: BuildForce Canada
Economic environment
The rest of the world The speed of recovery for developing and emerging economies is expected
to outpace that of the developed ones over the medium term, despite a slowdown in growth.
Over the longer term, growth in the developed economies will remain below that of developing ones as a result of slower population growth and the fiscal constraint associated with the need to reduce large government deficits.
Canada’s largest trading partners include the United States, Europe and Japan. As a result, export demand is expected to grow in line with economic growth in the advanced economies.– The outlook for major trading partners is weaker in the short term,
due to consumer and government austerity and policy uncertainty.– There is expected to be improvement in the medium to long term, with
deficit and debt reduction leading to increased business and consumer confidence.
Economic environment
Commodities: oil and gas In the short term, real commodity prices are expected to remain weak, but
relatively high in historical terms. Subsequently, prices are expected to increase over the forecast period:
– Oil prices, as measured by the WTI at Cushing, are assumed to exceed their previous peak of about US$100 per barrel in 2017, while those for natural gas as measured at the Henry Hub are not expected to return to their previous peak.
– The relatively weak performance of natural gas reflects the large increases in the amount of gas that is expected to be obtained from shale gas deposits across North America.
Oil and gas pricesNominal US$ (see relevant y-axis)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
0
20
40
60
80
100
120
140
0
5
10
15
20
25
30
WTI oil/BBL (left axis) Henry Hub gas/MMBTU (right axis)
Forecast
Source: BuildForce Canada
Economic environment
Commodities: metals and minerals Prices for metals and minerals are expected to weaken in the short term as a
result of weak global growth prospects. While prices are assumed to increase over the long term, the increases will
be much smaller than those observed over the past few years.– The outlook for base metals is largely influenced by the outlook for
China’s economy and the intensity of metals in overall production in its economy. Growth in the Chinese economy is expected to continue, but the intensity of metal use is expected to decline as the economy diversifies, moving from goods toward services.
– Real prices for precious metals are expected to decline as (i) institutional investors increasingly consider them less attractive “safe haven” alternatives and (ii) due to weakening physical demand for them.
Metals and minerals prices(Index 2007=100)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
0
20
40
60
80
100
120
Metals and minerals
Forecast
Source: BuildForce Canada
Housing starts and household formation*
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
10,000
20,000
30,000
40,000
50,000
60,000
Housing starts Household formationSource: BuildForce Canada
Forecast
Source: BuildForce Canada
* Household formation refers to the change in the number of households (persons living under one roof or occupying a separate housing unit) from one year to the next. It is the means by which population growth is transformed into demand for new housing.
Residential construction investment$2007 millions*
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
New housing RenovationSource: BuildForce Canada
Forecast
Source: BuildForce Canada
Calgary floods add spending
* $2007 millions indicates that the investment values are in year 2007 dollars (base year), that is, adjusted for inflation. This is used to calculate the real physical year-to-year change of the value of construction, factoring out growth (increase value) due to increases in prices.
Residential construction labour requirements
Residential construction employment
Spending related to flood damage drives up activity late in 2013 and into 2014. – Flood-related work builds a cycle into renovation spending, as work is
concentrated in 2013 and 2014. There is a moderate housing cycle; turning down in 2016 and up in 2019. Residential construction employment grows by just under 6,500 jobs
(14 percent) from 2014 to 2023.
Residential construction labour requirements
Residential construction employment
Trades and occupations most impacted by the new housing cycle include:– construction managers– sheet metal workers– tilesetters– trades helpers and labourers
Residential construction employment indexSelected trades (Index 2009=100)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
90
110
130
150
170
190
210
Total (all trades) Construction managers Tilesetters Trades helpers and labourers Sheet metal workers
Inde
x 20
09 =
100
Forecast
Source: BuildForce Canada
Residential construction labour requirements
Residential construction employment
Trades and occupations most impacted by renovations activity and flood damage work include:– floor covering installers– refrigeration and air conditioning mechanics– residential and commercial installers and servicers*– residential home builders and renovators– roofers and shinglers
* Residential and commercial installers install and service a wide variety of interior and exterior prefabricated products such as windows, doors, electrical appliances, water heaters, fences, play structures and septic systems at residential or commercial properties. Example titles: aluminum window installer, eavestrough installer, electric appliance installer, exterior cladder, fence erector, hot tub installer, kitchen cupboard and vanity installer, recreation structure erector, siding installer, sign installer, swimming pool installer, water conditioner servicer, water heater servicer, window installer.
Residential construction employment indexSelected trades (Index 2009=100)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
90
100
110
120
130
140
150
160
170
Total (all trades) Floor covering installers Refrigeration and air conditioning mechanics Residential home builders and renovators Residential and commercial installers and servicers Roofers and shinglers
Inde
x 20
09 =
100
Forecast
Source: BuildForce Canada
Non-residential construction investment $2007 millions*
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
ICI (institutional, commercial, industrial) building EngineeringSource: BuildForce Canada
Forecast
Source: BuildForce Canada
* $2007 millions indicates that the investment values are in year 2007 dollars (base year), that is, adjusted for inflation. This is used to calculate the real physical year-to-year change of the value of construction, factoring out growth (increase value) due to increases in prices.
Building construction investment $2007 millions*
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
1,000
2,000
3,000
4,000
5,000
6,000
Industrial building Commercial building Institutional buildingSource: BuildForce Canada
Forecast
Source: BuildForce Canada
* $2007 millions indicates that the investment values are in year 2007 dollars (base year), that is, adjusted for inflation. This is used to calculate the real physical year-to-year change of the value of construction, factoring out growth (increase value) due to increases in prices.
Non-residential construction labour requirements
Non-residential building There is a late-2013 and 2014 surge in commercial, institutional and industrial
work related to the flood. Activity switches back to new building construction from 2015 to 2023 with:
– a short-term drop in 2015 as flood work ends – steady growth as the Alberta economy grows from 2016 to 2023
Labour requirements for ICI (industrial, commercial and institutional) work grow more slowly than engineering and resource work from 2016 to 2019 and then provide a steady increase in jobs from 2020 to 2023.
Engineering construction investment $2007 millions* (see relevant y-axis)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Other engineering (left axis) Oil Sands (left axis) Roads/highways/bridges (right axis)
Forecast
Source: BuildForce Canada
Oil sands ramp up Other projects wind down
* $2007 millions indicates that the investment values are in year 2007 dollars (base year), that is, adjusted for inflation. This is used to calculate the real physical year-to-year change of the value of construction, factoring out growth (increase value) due to increases in prices.
Non-residential construction labour requirements
Major engineering and industrial projects
Many large engineering projects are underway and ending in 2013-2014. Major projects (excluding oil sands) starting up include:
– flood repair (roads, bridges) ending in 2014– electrical generation and transmission (renewable and conventional)– pipelines (including Energy East)
Oil sands projects include:– in-situ projects scheduled to start up in 2015-2016 and then build toward
a peak in 2019– Fort Hills starts in 2014
As the oil sands industry matures and capacity grows larger, employment shifts from new capital projects to increased ongoing maintenance work and sustaining capital projects over the long term.
Non-residential construction labour requirements
Major engineering and industrial projects Oil sands projects dominate employment demands for:
– boilermakers– carpenters (scaffolding)– construction managers– contractors and supervisors– crane operators– Electricians– Heavy equipment operators and mechanics– insulators– ironworkers (structural and reinforcing)– sheet metal workers– steamfitters and pipefitters– trades helpers and labourers– welders
Non-residential construction employment indexSelected trades (Index 2009=100)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
90
110
130
150
170
190
210
230
Total (all trades) BoilermakersCarpenters Construction managers Contractors and supervisors Electricians (including industrial and power systems)Insulators Ironworkers Steamfitters, pipefitters and sprinkler system installers Trades helpers and labourers Welders Crane operators
Inde
x 20
09 =
100
Forecast
Source: BuildForce Canada
Construction labour requirements
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Residential Non-residential Total
Empl
oym
ent
Forecast
Source: BuildForce Canada
The available workforce
Unemployment Unemployment in 2014 is heading down and approaches the record low set
in 2007. There is virtually no pool of local labour available for recruiting. Demographic limits on the younger population grows across the scenario
period. Both natural and actual unemployment decline into the future.
The available workforce
Replacement demand* and mobility The supply of skilled labour must be recruited from outside the local markets. Requirements in Alberta for BuildForce trades and occupations are rising in
related industries, including fabrication. Recruiting will come from out of the province, including:
– non-resident employment (inter-provincial employment and temporary foreign workers)
– permanent in-migration The distribution of in-migration varies by labour requirements. For instance:
– oil sands and other resource work draws on non-resident employment– replacement demands require permanent in-migration
* Replacement demand refers to the loss of workers due to retirement and mortality .
The available workforce
Mobility From 2014 to 2023:
– the labour force increases by 38,000– replacement demands (retirements + mortality) increase by 37,500– new entrants into the construction workforce (aged 30 and younger) are
approximately 30,000– the construction industry will need to recruit around 45,500 workers from
other industries (i.e., in-mobility)
The available workforce
Mobility Most of these 45,500 in-migrants will be needed permanently to replace
workforce losses.– A balance of labour requirements will be filled with non-residents.
This pattern of adjustment is not evenly distributed across the scenario, with– recruiting of non-residents focused on the timing of oils sands projects– permanent in-migration needed across the entire scenario for growing
maintenance and sustaining capital work
The available workforce
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
Retirements and mortality New entrants Net in-mobility Total change in labour force
Num
ber o
f wor
kers
Source: BuildForce Canada
Total change in labour force = New entrants + Net in-mobility - Retirements
Source: BuildForce Canada
Forecast
1 Qualified workers are available in local markets. Excess supply is apparent. Workers may move to other markets.
2 Qualified workers are available in local markets.
3Qualified workers in the local market may be limited by short-term increases in demand. Established patterns of recruiting are sufficient.
4 Qualified workers are generally not available in local markets. Recruiting may extend beyond traditional sources and practices.
5 Qualified workers are not available in local markets. Competition is intense.
Labour market rankings
Labour market rankings:Alberta – overall
Trades and occupations 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Boilermakers 3 4 4 4 4 4 4 4 3 3 3Bricklayers 3 4 4 3 3 3 3 3 3 3 3Carpenters 4 4 4 4 3 3 3 3 3 3 3Concrete finishers 3 4 3 3 3 3 3 3 3 3 3Construction estimators 4 4 4 4 3 3 3 3 3 3 3Construction managers 4 4 4 4 3 3 3 3 3 3 3Construction millwrights and industrial mechanics
3 3 3 3 3 3 3 3 3 3 3
Contractors and supervisors 3 4 4 4 3 3 4 3 3 3 3Crane operators 3 4 4 4 3 3 4 3 3 3 3Drillers and blasters 4 4 3 3 3 3 3 3 3 3 3Electricians (including industrial and power systems)
3 4 4 4 3 3 3 3 3 3 3
Elevator constructors and mechanics
3 3 3 3 3 3 3 3 3 3 3
Floor covering installers 3 4 3 3 3 3 3 3 3 3 3Gasfitters 4 4 4 3 3 3 3 3 3 3 3Glaziers 3 4 3 3 3 3 3 3 3 4 4Heavy equipment operators (except crane)
3 4 3 3 3 3 3 3 3 3 4
Heavy-duty equipment mechanics 3 4 3 4 4 4 4 3 3 3 4
Labour market rankings:Alberta – overall (continued)
Trades and occupations 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Industrial instrument technicians and mechanics 3 3 3 4 3 3 3 3 3 3 3
Insulators 3 4 4 4 4 3 4 4 3 3 3Ironworkers and structural metal fabricators and fitters 3 4 4 4 4 4 4 3 3 3 3
Painters and decorators 3 4 3 3 3 3 3 3 3 3 3Plasterers, drywall installers and finishers, and lathers 4 4 4 3 3 3 3 3 4 4 4
Plumbers 3 4 3 3 3 3 3 3 3 3 3Refrigeration and air conditioning mechanics 4 4 4 3 3 3 3 3 3 3 3
Residential and commercial installers and servicers 3 4 3 3 3 3 3 3 3 3 3
Residential home builders and renovators 4 4 4 3 3 3 3 3 4 4 4
Roofers and shinglers 4 4 4 3 3 3 3 3 4 4 4Sheet metal workers 3 4 4 4 4 3 4 3 3 3 3Steamfitters, pipefitters and sprinkler system installers 3 4 5 5 4 4 4 4 3 3 3
Tilesetters 4 4 3 3 3 3 3 3 3 3 3Trades helpers and labourers 4 4 3 3 3 3 3 3 3 3 3Truck drivers 3 4 3 4 3 3 4 3 3 3 3
Welders and related machine operators 3 4 4 4 4 4 4 3 3 3 3
Alberta oil sands
Oil sands highlights
Projects and schedules The Fort Hills project increases requirements in 2014 and 2015. A long list of in-situ projects are anticipated from 2016 to 2019, with a notable
pause in growth in 2018 and acceleration in 2019. Associated demands for construction of electricity and pipeline infrastructure
is included in other non-residential activity. Rankings for oil sands markets are focused on the annual increase in labour
requirements.– There is evidence of a very high proportion of non-resident employment
(i.e., fly-in, fly-out).
CAPP oil sands production (000s BBL/Day)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
500
1,000
1,500
2,000
2,500
3,000
Raw in-situ Raw mining SCO
000s
BB
L/D
ay
Forecast
Source: BuildForce Canada based on Crude Oil Forecast, Markets and Transportation (CAPP, June 2013)
Oil sands construction employment indexSelected trades (Index 2009=100)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
90
140
190
240
290
340
All trades
Inde
x 20
09=1
00
Forecast
Source: BuildForce Canada
Pace of hiring decelerates and then declines
Oil sands construction employment indexSelected trades (Index 2009=100)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
50
100
150
200
250
300
350
All trades
Inde
x 20
09=1
00
Forecast
Source: BuildForce Canada
23,000 jobs added2014–2019
43,000 jobs added2009–2019
Labour market rankings: Alberta oil sands
Trades and occupations 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Boilermakers 4 5 5 4 4 4 4 4 3 3 3
Bricklayers (primarily refractory) 4 4 4 4 3 3 4 3 3 3 3
Carpenters (including scaffolders) 4 4 4 4 3 3 4 3 3 3 3
Concrete finishers (cement masons) 4 4 4 4 3 3 4 3 3 3 3
Construction estimators 4 4 4 4 3 3 4 3 3 3 3
Construction managers 5 5 4 4 3 3 4 3 3 3 3
Millwrights 4 4 4 4 3 3 4 3 3 3 3
Contractors and supervisors 4 4 4 4 3 3 4 3 3 3 3
Crane operators 4 4 4 4 4 3 4 3 3 3 3
Electricians 4 4 4 4 4 3 4 3 3 3 3
Heavy equipment operators (except crane)
4 4 3 4 3 3 4 3 3 3 4
Labour market rankings: Alberta oil sands (continued)
Trades and occupations 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Heavy-duty equipment mechanics 4 5 4 4 4 3 4 4 3 3 4
Industrial instrument technicians 4 4 4 4 3 3 4 3 3 3 3
Insulators 4 4 4 4 4 3 4 4 3 3 3
Ironworkers (structural and reinforcing)
4 4 4 4 4 4 4 3 3 3 3
Painters 4 4 4 4 3 3 4 3 3 3 3
Sheet metal workers 4 4 4 4 4 3 4 3 3 3 3
Steamfitters, pipefitters 4 5 5 4 4 4 4 4 3 3 3
Trades helpers and labourers 4 4 4 4 3 3 4 3 3 3 3
Truck drivers 4 4 4 4 3 3 4 3 3 3 3
Welders 4 4 4 4 4 4 4 3 3 3 3
The available workforce
Mobility Rankings are intended to capture market conditions unique to Alberta. Implied mobility signals Alberta requirements, not the available workforce in
other provinces. Engineering and resource project demands in other provinces dominate this
analysis.– The strongest competing demands for key trades will come from British
Columbia, where mining, electricity, pipeline and LNG* projects start from 2015 to 2018.
Projects are scheduled to wind down in Newfoundland and Labrador in 2015, with variable conditions in Saskatchewan from 2015 to 2020 and in Ontario across the scenario period.
* Liquefied natural gas
The available workforce
Mobility (centres of resource construction) Major projects in rural or remote areas require a specialized workforce,
including:– boilermakers– construction managers and estimators– construction millwrights crane operators– electricians – heavy-duty equipment mechanics– plumbers – steamfitters and pipefitters – welders
Labour market hot spots
Our thanks to …
The production of Construction and Maintenance Looking Forward 2014−2023 would not have been possible without the valuable input from the following organizations: Alberta Advanced Education and Technology Alberta Construction Association Alberta Employment and Immigration Alberta Finance and Enterprise Alberta Roadbuilders and Heavy Construction Association Building Trades of Alberta Canada Mortgage and Housing Corporation Canadian Home Builders’ Association – Alberta Canadian Natural Resources Limited Christian Labour Association of Canada Construction Labour Relations – Alberta Enbridge Inc. Merit Contractors Association Nexen Inc. Progressive Contractors Association of Canada Service Canada Syncrude Canada Ltd.
About BuildForce Canada
Originally created in 2001 as the Construction Sector Council, BuildForce Canada is a national industry-led organization committed to working with the construction industry to provide information and resources to assist with its management of workforce requirements.
Like many industries, the construction industry faces a number of human resource challenges. These include the need to accurately forecast labour demand and supply, to increase the mobility of workers, to make the most of new technologies, and to cope with an aging workforce.
This report is part of BuildForce Canada’s Labour Market Information Program. It is also available in both official languages and can be obtained electronically at www.constructionforecasts.ca.
For more information, contact:
BuildForce Canada
Phone: 613-569-5552
February 2014
