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Contractors see skilled labour shortage as obstacle to business growth, survey finds

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by Vince Versace

Contractors in the Ontario Construction Secretariat’s first-ever contractor survey view lack of skilled labour as the leading factor to inhibit business growth.

Industry Survey

Lack of skilled labour inhibiting business growth was the leading factor cited by contractors in the Ontario Construction Secretariat’s first-ever contractor survey.

“There was some regional variation to this response from 36 per cent of contractors citing a lack of skilled labour as a barrier to growth in Central Ontario to 21 per cent in the north,” explained Katherine Jacobs, secretariat research and analysis director.

Jacobs gave an overview of the secretariat’s contractor survey during its recent state of the industry and outlook conference.

The secretariat teamed with the Pollara Group to have 600 contractors surveyed on a range of issues such as construction activity, labour availability and growth barriers. The survey was done last fall.

“We hope to do the survey on an annual basis so we can pick up on trends earlier on instead of waiting for building permits total which only tell us what happened,” said Jacobs. “Being able to see a trend may help us identify barriers and challenges facing contractors and how to approach them.”

The first-ever survey was lauded not just for its sample size of contractors but also how detailed it was about the current contractor landscape.

“The survey is an admirable attempt and it provides the type of information we need,” said Clive Thurston, Ontario General Contractors Association president. “It shows us the issues on the minds of our members, which is very helpful.”

More than half of the contractors surveyed reported labour shortages in roofers, carpenters, sheet metal workers, painters and bricklayers. Worker shortages hit highest in Eastern Ontario where 70 per cent of the contractors surveyed reported a general worker shortage.

“Skilled labour shortages are an industry wide problem, it is on everyone’s lips and there is no question it is affecting business growth,” said Thurston.

Nineteen per cent of contractors stated that the economy was a barrier inhibiting growth, followed by cost of material at 11 per cent.

Despite the identified barriers, 85 per cent of the all contractors surveyed expect 2008 to be a steady and likely busier year than 2007. Strong construction activity in their area and growing demand for construction services were the two main reasons noted for this optimism, said Jacobs.

“Forty-five per cent of contractors feel they will be doing more work over the next year, compared to only 11 per cent who felt they will do less,” said Jacobs. “Contractors primarily operating in the commercial sector were even more positive.”

Jacobs noted that one in four contractors reported doing more work in 2007 and that the commercial sector was seen as a key growth area. Also, contractors in Northern Ontario and the GTA reported the most consistent work increases.

The survey also helped create the foundation for a contractor profile at the secretariat. Thirty-three per cent of those surveyed were general contractors and 67 per cent were trade contractors. Sixty-one per cent had 10 employees or less and seven per cent of contractors reported revenues of $10 million or higher.

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