BMI View: The Canadian construction industry will recover in 2016 as the Liberal government spends big on infrastructure projects in a bid to stimulate the economy. The infrastructure and non-residential sectors will be the main drivers in growth over the next four years, offsetting declines in capital expenditure in the extractive sector and a slowdown in homebuilding.
Latest Updates And Structural Trends
We expect a recovery in the Canada construction industry in 2016, driven primarily by heightened public investment in infrastructure. The Liberal government of Prime Minister Justin Trudeau plans to double public spending on infrastructure over the next 10 years.
Following an estimated contraction of 1.8% for 2015, the construction industry will bounce back and post 2.7% real growth in 2016 and average a heightened 3.0% annually over the four year term of the Liberal government from 2016 to 2019.
Transport infrastructure - especially rail - and renewable energy will outperform over the next four years, as the liberals aim to stimulate the economy and incentivize "green infrastructure".
We also expect non-residential construction to benefit from increasing investment into a recovering manufacturing sector, which will now benefit from a weakened Canadian dollar.
Infrastructure and non-residential will now be the major growth drivers for the construction industry over the next four years, offsetting a continued decline in capital expenditure in the extractive sector and a slowdown in homebuilding.
|e/f = BMI estimate/forecast. Source: Statistics Canada, BMI|
|Construction industry value, CADbn||138.52||144.35||152.20||160.11||168.29||175.90||182.75|
|Construction Industry Value, Real Growth, % y-o-y||-1.82||2.71||3.24||3.00||2.91||2.32||1.69|
|Construction Industry Value, % of GDP||7.1||7.1||7.1||7.1||7.2||7.2||7.1|
Canada's RRI score has increased this quarter from 64.9 to 67.3, in line with a stronger outlook for growth in the construction industry.
The Industry Rewards score jumped up to 50.0 out of 100 as the Liberal government's stimulus plans bring up growth forecasts.
Canada continues to receive high scores for Country Risks and Industry Risks indices at 76.3 and 85.0, respectively.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Canada Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Canada Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Canadian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Canada to test other views - a key input for successful budgetary and planning in the Canadian infrastructure market.
- Target business opportunities and risks in the Canadian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Canada.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.