CANADIAN CONSTRUCTION INDUSTRY FORECAST; 2007-2012 …

          CANADIAN CONSTRUCTION INDUSTRY FORECAST; 2007-2012
                           DECEMBER 2007


    PREPARED BY THE CANADIAN CONSTRUCTION ASSOCIATION AND THE
                  CONSTRUCTION SECTOR COUNCIL

Disclaimer: The following forecast data has been produced by the Construction Sector
Council (CSC) and provided to the Canadian Construction Association (CCA) for
informational use only without warranty, express or implied. Any significant changes in
economic conditions as a result of unforeseen world events and provincial policy
changes, as well as unforeseen projects in the public and private sector will alter the
outlook.

Note that all economic and labour market forecast information can now be accessed at
www.constructionforecasts.ca, an interactive website allowing users to tailor requests
based on sector, region, and timeframe.

Economic Performance

The construction outlook released by the Construction Sector Council as of spring 2007
suggests that 2008 will be very much like 2007. The current forecast calls for real
investment in construction to increase by 3.5% in 2007 and 3.1% in 2008. However,
starting in 2009, the pace of activity will level off, with investment projected to increase
by 1.7% in 2009 before declining by 0.1% in 2010 and 0.9% in 2011. See the summary
under Table 1, and constant dollar investment values in Appendix 1.

The main driver of industry growth over the next few years will remain the non-residential
sector. In 2007, data suggest that the non-residential sector, including the building
sector and engineering construction, will grow by 7.9%, and an additional 5% in 2008.
Activity will moderate somewhat in 2009 with growth of 3.1%, then fall off with an
expected contraction of 0.5% in 2010 and a further contraction of 1.4% in 2011.

The outlook suggests that the residential sector will slowdown into the foreseeable
future. Following an expected contraction in residential construction of 2.4% in 2007, the
residential market is expected to post a small gain of 0.3% in 2008, followed by a
contraction of 0.4% in 2009, and an almost fixed growth of 0.3% in 2010 and 0% growth
in 2011.

Within the non-residential construction industry, engineering construction will continue to
post the strongest gains. In 2007, engineering construction is expected to grow by
9.7%, followed by 5.7% in 2008 and 3.7% in 2009. Industrial construction will remain on
a blistering pace ­ the sector is expected to grow by 9.7% in 2007, 9.4% in 2008, but is
expected to cool in 2009 to only 1.5% growth, followed by several years of contraction.

Institutional and government construction (such as hospitals and schools), as well as
commercial and high residential construction are both expected to post only moderate
gains over the coming years. Institutional construction is expected to post gains in the 1
to 2% range over the forecast period. Following a relatively strong year in 2007 of 3.5%
growth, the commercial and high residential sector will slow to 1.1% growth in 2008,
2.7% in 2009, and 1.7% in 2010. See Table 2 for a summary.

For a list of provincial growth figures, visit www.constructionforecasts.ca. For
explanatory text by province, visit www.csc-ca.org, and look under individual
provincial Labour Market Information reports.


Employment1

As usual, employment forecast trends tend to be in line with economic performance.
Excluding Quebec, employment in the construction industry in the rest of Canada (ROC)
is forecast to grow rapidly by 5.8% in 2007 and 4% in 2008, before leveling off in 2009
with growth of only 1.3%. By 2010, employment is expected to decline by 1%, followed
by a further drop of 1.6% in 2011, before rebounding by a modest 0.2% in 2012.

Not surprisingly, employment gains will be strongest in Western Canada in 2008.
Alberta's construction industry will lead the way with employment growth expected of
7.8%, followed by Saskatchewan at 6.6%, and British Columbia at 6%. Employment
gains in other provinces are expected to be modest at best in 2008. For a summary of
employment growth rates nationally and in all provinces except Quebec, see Table 3.


Tables


Table 1 illustrates annual percentage change of construction investment for the
residential, non-residential, and overall construction industry; 2006-2012


            2006          2007       2008       2009        2010       2011        2012
OVERALL     3.9           3.5        3.1        1.7         -0.1       -0.9        -1.3
Non-        5.9           7.9        5.0        3.1         -0.5       -1.4        -2.3
residential
Residential 1.4           -2.4       0.3        -0.4        0.3        -0.1        0.3




1
  Note that employment numbers do not include the Province of Quebec. The Commission de la
construction du Quebec maintains a separate accounting of employment in Quebec ­ for more
information on employment numbers in Quebec, consult the CCQ website at www.ccq.org.
     Table 2 illustrates annual percentage change in construction investment for the
     non-residential subsectors; 2006-2012.


                      2006          2007           2008         2009        2010     2011      2012
     Engineering      6.3           9.7            5.7          3.7         -0.8     -2.1      -3.5
     Industrial       7.1           9.7            9.4          1.5         -3.7     -3.0      -2.9
     Commercial       6.3           3.5            1.1          2.7         1.7      0.9       1.2
     and high
     residential
     Institutional    2.6           1.6            1.6          1.4         0.9      1.4       1.4
     and
     Government


     Table 3 illustrates annual employment growth in the overall construction industry,
     excluding Quebec; 2006-2012.


               2006          2007           2008          2009            2010       2011        2012
% Change -     5.1           5.8            4.0           1.3             -1.0       -1.6        0.2
National
Alberta        7.7           11.4           7.8           2.6             -2.2       -3.9        -0.9
BC             6.6           13.1           6.0           -1.1            -3.1       -4.8        -1.5
Manitoba       7.9           3.3            1.2           3.9             2.4        1.2         1.9
New            11.4          15.5           -0.2          -10.8           -7.4       -0.4        0.6
Brunswick
Nfld and       0.1           9.0            -1.8          3.7             -2.3       -5.2        -3.9
Labrador
Nova Scotia    12.0          5.5            0             -2.3            -2.8       -2.3        1.9
Ontario        2.0           -0.4           1.9           2.7             0.9        0.9         1.6
PEI            26.6          6.1            -10.6         -10.2           0.8        0.8         0.9
Sask.          7.0           2.9            6.6           4.5             0.5        -0.2        -1.1


     Appendix A: 1997 constant dollar construction investment values for the overall,
     residential and non-residential construction sectors; millions of dollars; 2006-2011
     (Note: These figures are indexed to 1997 dollars. They do NOT represent current
     year dollar values, and are intended for year over year comparative purposes
     only).


                     2006          2007        2008             2009       2010      2011      2012
     OVERALL         142,846       147,807     152,353          154,963    154,657   153,255   155,258
     Non-            81,043        87,463      91,822           94,704     94,202    92,854    90,685
     residential
     Residential 61,803            60,344      60,531           60,259     60,455    60,401    60,573