The latest report from the Timetric Construction Intelligence Center (CIC) points out that although Canada's construction output shrank by 1.7% year-on-year in 2015, it is expected to improve over the next five years, reaching $321 billion by 2020.
Canadian construction output fell to $28.9 million in 2015 from $29.41 million in 2014. Weak economic environment, low commodity prices, low fixed asset investment and high unemployment all contributed to the weak performance of the construction industry.
However, the outlook for the industry is increasingly clear, and the value of the construction industry will rebound significantly in 2016, driven by the construction of public facilities, renewable energy infrastructure, investment in commercial projects, and the improvement of consumer and investor confidence. Some government programs, such as the Affordable Housing Initiative (AHI), the New Build Canada Program (NBCP), and Made in Canada, will continue to support the growth of Canada's construction industry over the next five years (2016-2020).
The average annual growth rate of Canadian construction output in the next five years is expected to be 2.13%, which is slightly lower than average annual growth rate of 2.29% in the past five years. Timetric expects Canadian construction output to rise from $289 billion in 2015 to $321.1 billion in 2020 (based on the 2010 dollar exchange rate).
Population growth and urbanization, as well as the development of domestic manufacturing, will be the driving force behind the growth of construction industry. In addition, the government's efforts to improve housing and public infrastructure will also contribute to the development of the domestic construction industry. For example, to provide affordable housing for low-income and middle-class people, the Canadian government plans to spend $6 billion on social infrastructure construction by 2020, including the renovation of old houses and the construction of new houses.
In the next five years, residential construction will play a more important role in the construction industry, which is expected to account for 38.4% of the total construction industry by 2020 due to population growth, urbanization and economic environment improvement. According to the United Nations Department of Public Information on Economic and Social Affairs (UNDESA), Canada's population is expected to reach 37.6 million by 2020 and 40.4 million by 2030. The government's efforts to provide affordable housing for low-income people and the middle class through the AHI program have also increased the demand for residential construction.
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