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Construction and Maintenance Looking Forward · PDF fileConstruction and Maintenance Looking...

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  • Construction and Maintenance Looking ForwardNewfoundland and LabradorThe 2015 Construction and Maintenance Looking Forward scenario for Newfoundland and Labrador projects a cyclical path for employment, resulting in a moderate decline from 2015 to 2024.

    Resource developments and the associated construction boom have dominated the provinces economy for 10 years, with peak activity expected in 2015. As resource projects are completed between 2016 and 2018, a large portion of the out-of-province workforce will return home, restoring a more normal level and mix of construction activity.

    The forecast scenario anticipates a second wave of resource investment from 2019 to 2022 that carries employment back up, but below, the 2015 peak. Demographic restrictions will be significant at that time and construction industry recruiters may face the challenge of drawing out-of-province workers back to fill jobs.

    Sustaining a needed skilled and experienced labour force will be a challenge. The natural population is declining as local deaths exceed births in each year of the forecast scenario and estimated retirements rise.

    HIGHLIGHTS (2015 TO 2024) Large mining, electricity generating stations, transmission

    lines and offshore drilling platform projects drive non-residential investment to a new peak in 2015. Investment declines as projects wind down, but new

    proposed mining and offshore resource developments generate a second, but smaller, wave of activity later in the scenario period.

    Following several years of decline, new housing investment is expected to decline again in 2015, but then rise marginally over the medium term, with investment remaining below the previous 2012 peak level of activity.

    Total construction employment falls by just over 2,000 jobs from 2015 to 2024. Current big resource projects add their last round of

    hiring in 2015. Major projects begin to wind down and other construction

    markets join the declining trend from 2016 to 2018.

    20152024Key Highlights

    BUILDFORCES LMI SYSTEMBuildForce Canada uses a scenario-based forecasting system to assess future labour market conditions. This labour market information (LMI) system tracks measures for 34 trades and occupations. BuildForce consults with industry, including owners, contractors and labour groups, to validate the scenario assumptions and construction project lists, and seeks input from government on related analysis. It was necessary to recast this years outlook prior to publishing to better reflect the significant changes in current market conditions.

  • Residential construction started to decline in 2012, and new housing employment continues on a downward trend to 2022.

    Almost 6,000 workers are estimated to retire over the scenario period, far in excess of the estimated first-time new entrants1 to the construction workforce.

    These market trends impact local and out-of-province workers, as many of Newfoundland and Labradors skilled labour force work on projects outside of the province.

    Both interprovincial mobility and international immigration will be key, as the required workforce from 2019 to 2022 may need to be drawn from outside the local construction market.

    At various times across the scenario period, Newfoundland and Labrador employers in industrial, commercial and engineering markets may compete with hiring in other regions such as British Columbia, Manitoba and Saskatchewan.

    NON-RESIDENTIAL CONSTRUCTION Employment in non-residential construction will fall by

    1,700 jobs across the 20152024 scenario period a loss of 11 percent from the 2015 peak with significant shifts across the scenario: As known major projects wind down over the medium

    term, employment declines by almost 4,500 jobs from the peak in 2015 to a trough in 2018 a loss of 27 percent.

    Proposed new resource developments add back almost 3,000 jobs from 2019 to 2022.

    The biggest gains and losses occur in engineering construction work, with the largest fluctuations concentrated in a subset of trades that includes: carpenters heavy-duty equipment mechanics millwrights pipefitters trades helpers and labourers welders

    RESIDENTIAL CONSTRUCTION Overall, residential employment declines by 400 jobs

    across the scenario period, but there may be some opportunities for the unemployed to find work in other construction markets.

    New housing activity is driven by a combination of local demographics and the housing requirements related to proposed new resource development projects over the long term. Local demands drove activity up in the early 2000s

    and resource investments accelerated the growth to 2011.

    New housing had been expanding ahead of household formation2 and this excess has prompted a down cycle that began in 2012 and will reduce employment to 2019.

    By 2022, employment in new housing falls by 1,700 jobs from a peak in 2012 most of this loss had already happened by 2014 and it includes a further decline of more than 400 jobs projected from 2015 to 2022.

    A modest housing revival restores some lost jobs late in the scenario period.

    Renovation and maintenance employment, related to the existing housing stock, remain unchanged over most of the scenario.

    THE AVAILABLE WORKFORCE From 2015 to 2024, province-wide demographic trends

    will limit population growth, as the natural rate of deaths exceeds births by 13,100.

    This natural decrease is partly offset by the arrival of an estimated 9,500 out-of-province workers, leaving an estimated net decline of 3,600 in population across the scenario period.

    International immigration is projected to provide the bulk of the new arrivals, as interprovincial migration balances in-mobility3 and out-mobility across the period.

    The total labour force for all industries is estimated to decline by 1,000 workers under the projected changing demographic conditions.

    Unemployment in most industries is currently at low historical levels and declines further from 2015 to 2024.

    Even modest increases in labour requirements will need to be supplied from outside the traditional Newfoundland and Labrador workforce.

    CHANGES IN CONSTRUCTION LABOUR SUPPLYThe BuildForce LMI system tracks supply and accounts for the change in the available labour force, including retirements, new entrants and net in-mobility3. Retirements measure permanent losses to the workforce, which are

    1 The amount of new entrants is measured by applying the traditional proportion of the provincial workforce aged 30 and younger that enters the construction industry for the first time. The projected estimate across the scenario period assumes that the construction industry is able to recruit this group in competition with other industries.

    2 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.

    3 In-mobility refers to the arrival of workers from outside the local construction industry.

    2 NEWFOUNDLAND AND LABRADOR CONSTRUCTION AND MAINTENANCE LOOKING FORWARD

  • partially offset by the entry of first-time workers aged 30 and younger to the construction labour force. Figure 1 tracks the annual changes in the labour force across the forecast period.

    Net in-mobility is required to meet overall labour demands, as estimated new entrants may not be sufficient to offset retirements.4

    The ebb and flow of labour requirements across market segments creates a demand for in-mobility in 2015 and again from 2019 to 2022.

    There are risks of construction workers leaving the province during periods of lower demand, especially in 2017.

    RANKINGS, RISKS AND MOBILITYBuildForce assesses market conditions for 34 trades and occupations in Newfoundland and Labrador using a ranking system that combines measures of the change in employment, unemployment, net in-mobility and adjustments based on industry input. The rankings reflect a combination of residential and non-residential market conditions unique to the province based on current and proposed construction activity. In addition, assumptions on provincial economic and population growth, new entrants to the labour force and migration patterns (interprovincial

    and international) are built into the forecast scenario and included in the ranking assessment (see ranking table on page 5).

    Ranks are highest in 2015 and again between 2020 and 2022 as proposed new resource developments come on stream.

    Small annual increases in employment (e.g., less than 2 percent) later in the scenario period are enough to create tight labour markets.

    Extended periods where markets are ranked as a 3 may mask short-term peak demands for maintenance work and new project start-ups.

    Ranks signal the potential for mobility: Residential employers may lose qualified workers to

    commercial and institutional projects depending on the portability of skills, experience and willingness to move across markets.

    Newfoundland and Labrador employers could lose specialized non-residential trades to other provinces from 2016 to 2018 and will need to draw them back after 2020.

    Limits to worker availability later in the scenario period are driven by older age profiles and rising retirements for specific trades and occupations, including:

    construction managers contractors and supervisors residential homebuilders and renovators

    4 Recruiting is required by the construction industry from other industries and/or other provinces or countries to meet labour requ

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