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Construction industry faces evolving trends

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by Denise Flint last update:Sep 13, 2006

There are busy times ahead for the construction industry, according to Canadian Construction Association (CCA) president Michael Atkinson.

Industry Overview


There are busy times ahead for the construction industry, according to Canadian Construction Association (CCA) president Michael Atkinson.

Speaking at the Annual Conference of the Association of Consulting Engineers of Canada in St. John’s, Nfld., Atkinson identified six emerging trends that will have major impacts on the industry.

First is an unprecedented increase in construction across the country.

The federal government has announced $13 billion worth of infrastructure work in the next five years, and industrial projects worth $200 billion are slated to take place over the next 15 years, approximately half of them in Alberta.

A sharp decrease in the number of workers is the second trend.

By 2015, the number of retirees will exceed the number of entrants into the industry, sparking a huge competition for workers.

Ironically, shortages of skilled workers will be exacerbated as new facilities are built, because each facility will need its own internal workers and will draw on the skilled trades to fill those positions.

“Procurement gurus are telling clients: ‘We have the internet now.’”

Michael Atkinson - CCA

International competition for workers is also on the rise. Already, American and Australian recruiters are scouting the international market.

“If you, as a potential immigrant to Australia, can show you are qualified in a certain trade, the Australian government will guarantee you entry in three days,” said Atkinson.

The third trend is the death of the knowledgeable client. The last economic downturn resulted in many companies downsizing, often at the expense of the engineering or real property departments.

Fiscal pressure led to a similar transformation in the public sector. The result is that clients are now more risk-averse because they no longer have the in-house ability to manage risk.

The fourth trend is what Atkinson calls the commoditization of construction.

“Procurement gurus are telling clients: ‘We have the Internet now. Why should buying buildings be any different than buying paperclips and software?’ But construction is not a commodity,” Atkinson cautioned.

The CCA is opposed to such practices as reverse auctions and Atkinson warned that differing laws between Canada and the United States, where the practice is prevalent, has led to a lot of misinformation concerning new methods of project bidding.

The greening of the construction industry is the next trend. Atkinson predicts that issues like waste management will become more important.

More work needs to be done in this area, such as finding markets for recyclable construction waste. He warned, however, against knee jerk responses.

“We want to be extremely proactive. But we need to ensure that solutions are true solutions rather than just seeming to be doing something on paper.”

Finally, Atkinson pointed to price volatility. For example, the price of copper pipe has risen nearly 71 per cent since April 2005 and other construction materials are also climbing. Competition for building materials from other countries such as China and India are on the increase, and gasoline and diesel fuel prices continue to outstrip inflation.

In response to questions from the floor, Atkinson suggested that more long term planning on the part of the various levels of government with regard to infrastructure projects would help the construction industry figure out what it needs to do about training workers and planning for the future.

He also predicted an increase in offsite prefabrication as demand for workers outstrips supply.

last update:Sep 13, 2006

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