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Ontario Construction Secretariat survey finds optimism for year ahead

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by Ian Harvey

Nearly half of contractors polled by the Ontario Construction Secretariat think they’ll be busier this year than last.

2010 Ontario Construction Secretariat conference

Nearly half of contractors polled by the Ontario Construction Secretariat think they’ll be busier this year than last. The results of the survey of 1,000 ICI contractors were tabled at the OCS State of the Industry and Outlook Conference 2010 in Toronto and suggest a wave of optimism is sweeping through the industry.

The question left hanging, as Jayson Myers, CEO of the Canadian Manufacturers and Exporters put it, is whether that enthusiasm is based on the assumption “that things can’t get worse than they are.”

Still, of the 49 per cent of contractors thinking positively, some 35 per cent say they’re getting more work this year, while 14 per cent say they’ll get “much more work.”

This is with about 42 per cent of firms saying they they did less business in 2009 and just 30 per cent saying they did more.

Generally, firms in eastern Ontario and larger firms did better and were more positive in their outlook, said Katherine Jacobs, director of research and analysis for the OCS, while those in southwestern Ontario did worse, mostly because the manufacturing sector was so hard hit.

The good news, said Jacobs, is that it wasn’t bad as it could have been last year.

For one, ICI building permits fell 43 per cent in the two years of recession in 1990-91 while last year the dip was just 11 per cent.

“And in 1990-91 it took 10 years before we pulled out of that downturn,” she said.

A look at the numbers in 2009 also shows the industry weathered the storm much better than the comparable downturn in 1990-91.

“In that recession, unemployment was 28.3 per cent in the construction industry whereas it peaked at 13 to 14 per cent in August 2009 and has come down since then,” she said.

The look ahead is still murky, she warned, despite the optimism.

“I think 2010 is going to be okay,” she said noting there are big transit plans and infrastructure for the Pan Am Games as well as nuclear-facility construction and refurbishment on the table in Ontario.

The outcome will hinge on the private sector’s ability to step in and pick up the load as the federal government stimulus package starts to wind down.

When asked if they’d felt any impact of the federal stimulus package in 2009, 49 per cent of contractors surveyed said it had “no impact” while 27 per cent said it was “minimal.”

Still, all those surveyed wanted the stimulus plan to continue past this spring’s cut off.

Jacobs said this underlines the assertion by many in the industry and elsewhere that the money has yet to really start flowing and that there will be a carryover effect in 2010 that will put more pressure on the private sector to carry that momentum into 2011.

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