Canada’s Construction Industry Set to Reach $304.6 Billion USD in 2023
Canada’s construction industry output value was estimated to be $291.2 billion USD in 2018. This is expected to grow to $304.6 billion USD in 2023 (measured at constant 2017 U.S. dollar exchange rates), at a compound annual growth rate (CAGR) of 0.90%, according to GlobalData, a leading data and analytics company.
GlobalData’s report, “Construction in Canada - Key Trends and Opportunities to 2023,” reveals that Canada’s construction industry growth decelerated to 0.6% in 2018, after growing at a CAGR of 4.3% in 2017. The sharp deceleration in activity was mainly driven by significant declines in residential construction, as well as repair, engineering and other construction activities.
The government’s planned investments in infrastructure are expected to support the growth of Canada’s construction industry. Under the “Investing in Canada Plan,” the government plans to invest a total of $139 billion USD in key infrastructure sectors through 2028.
“In addition, the government’s aim to improve local energy resources is expected to support investment in energy infrastructure projects, which will in turn fuel growth in the industry,” said Danny Richards, Lead Economist at GlobalData.
Residential construction was the largest market in the Canadian construction industry in 2018, accounting for 43.7% of its total value. Forecast-period market growth will be supported by the government’s efforts to build affordable houses. In the 2019 budget, the Canada Mortgage and Housing Corporation (CMHC) announced plans to spend $943 million USD to provide financial help to first-time home buyers from 2019 to 2022.
The total construction project pipeline in Canada -- as tracked by GlobalData and including all mega projects with a value above $25 million USD -- stands at $1.4 trillion CAD ($1.1 trillion USD). The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards late-stage projects, with 54.5% of the pipeline value being in projects in the pre-execution and execution stages as of May 2019.