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Cautious optimism in Ontario Construction Secretariat annual survey

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by Vince Versace

Ontario contractors remain cautiously optimistic about their construction work prospects for 2011, an Ontario Construction Secretariat survey reveals.

Ontario contractors remain cautiously optimistic about their construction work prospects for 2011, an Ontario Construction Secretariat (OCS) survey reveals.

“It is a ‘steady as she goes’ type of outlook,” said Sean Strickland, chief executive officer of the OCS. “Most regions are pretty consistent, with a majority of contractors expecting to do the same amount of work or even expand their business in 2011.”

The annual survey of industrial, commercial and institutional building contractors revealed that 44 per cent anticipate more work this year, and 34 per cent expect to increase their number of employees. The survey was conducted by Ipsos Reid.

Strickland said that while 55 per cent of survey respondents express optimism about the economy it is a “soft number” largely made up of contractors who believe the economy is only “somewhat good” rather than “very good.” The primary economic concerns among employers are access to financing, cash flow and the availability of new projects.

“The industry is cautiously optimistic on the work front, but concern remains on the overall state of the economy,” explained Strickland. “Confidence in the economy is not as robust as it has been in the past and I think that is a sentiment shared by most Canadians.”

Contractors in the Greater Toronto Area are the most positive about their work prospects, with 48 per cent of them expecting to conduct more business in 2011 and 40 per cent expecting to do the same. Respondents from Southwestern Ontario, particularly in the Windsor-Sarnia region, are the most negative.

Just 35 per cent of Windsor-Sarnia firms expect to have more work this year.

According to the survey, the commercial sector is expected to lead in increased construction activity this year followed by the industrial sector.

Strickland said the survey results indicate that stimulus programs — both federal and provincial — have worked and that governments need to learn a lesson from this.

“If construction is so good in times of crisis, policy makers must recognize that it is just as good at other times as well,” he said. “That is why it is critical to have an infrastructure program for the long-term, both provincially and federally.”

A long-term joint provincial-federal transportation infrastructure program, addressing transport areas from roads to rail and air, is something that should be developed, added Strickland.

“It is something we lack and it is required not just for jobs and construction but also for overall economic growth.”

The availability of skilled labour and staff remain a “key barrier to business expansion” the OCS survey revealed.

Only 18 per cent of respondents expect the availability of skilled construction workers to increase in 2011. Strickland said this indicates a need to increase construction career awareness and improved opportunities for apprentices to find work.

“Apprenticeship and availability of skilled labour continues to be challenge, governments need to continue looking at incentive programs,” he said. “The whole apprenticeship space needs some serious review and we are hopeful the Ontario College of Trades could provide some leadership in that area- in particular with labour market planning.”

Survey results also indicate that 46 per cent of all contractor firms expect the level of competition from other firms to increase in 2011. A majority of firms (86 per cent) employ fewer than 50 individuals and 67 per cent of them work on projects valued at less than $500,000.

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