Canada Faces Shortage of Skilled Construction Workers

Real Estate Agent with RE/MAX

Real estate is still the number one topic of conversation at Canadian cocktail parties, but home renovation is a close second. BuildForce Canada says construction workers install, repair or renovate work that's worth $200 billion every year, with demand for labour shifting from new construction to renovation. A new CIBC poll says 42 per cent of homeowners say they plan to do some renovation work this year, and they will spend an average of more than $17,000 on the work.


That is, if they can find someone to do it.


A new BuildForce report, Labour Market Assessments for the Residential Construction Industry 2015-2024, says the residential construction industry will need more than 129,000 new skilled workers during the next decade and at the current pace of new hires, there will be a shortage of people to do the work.


The report says that between 2015 and 2024, about 9,000 people will be added to the residential construction labour force. "This net increase includes the arrival of an estimated 92,000 new entrants and the departure of 113,800 older workers due to retirement and mortality," says the report. "The estimate for the arriving young people is based on the historic share of the population that has joined construction."


It says employers will "need to attract youth to construction in competition with other employers who will face similar human resource challenges."


To meet labour requirements, "the residential construction industry will need to recruit 31,000 workers through net in-mobility, or by drawing recruits in from other labour markets or from outside Canada," says the BuildForce report.


The construction industry has more than 300,000 firms and employs one out of every 14 workers in Canada. Ninety per cent of residential construction firms have fewer than five employees. In 2013, total employment in Canada grew by 1.3 per cent, while construction employment went up by 4.4 per cent.


The average age of a construction worker in 2014 in Canada was 41.


An annual Pulse survey of members of the Canadian Home Builders' Association says that builders and renovators have had problems finding skilled trades for several years, and it seems that issue is only going to get worse. The number of new workers under age 30 is declining.


"Demographic changes will add to market challenges," says the BuildForce report. "Slower population growth reduces the number of young people entering the workforce, which has the long-term effect of driving unemployment down and leaving a limited pool of local workers, while encouraging mobility across markets as employers look for workers outside their local labour market."


Carpenters, which includes framers, formworkers and finish carpenters, make up the largest group in residential construction at more than 20 per cent. Trades helpers and labourers come second, followed by home builders and renovators, construction managers, contractors and supervisors and painters and decorators.


Although some analysts say housing starts in Canada will decline in coming years, these reports "can be misleading and create the impression of rising unemployment and surplus labour in the residential sector…when the opposite is true," says the report. "In many markets across Canada it is hard to find the specialized and experienced workers that are needed."


When the real estate market is doing well, as it has in much of Canada for the last decade, renovation activity picks up as people buy houses and then renovate them to make them their own. With a homeownership rate of about 70 per cent of all households, and an aging housing stock, renovation activity continues to grow.


The CIBC report says 64 per cent of those planning to renovate will spend the money on basic home maintenance -- general repairs, painting, flooring and replacing appliances. About 32 per cent plan do to some landscaping, while 29 per cent will renovate the bathroom and 28 per cent plan kitchen improvements.


Thirteen per cent said they had to do repairs due to weather damage in the past year, as a severe winter and flooding across the country took its toll.


The BuildForce report says, "A key industry challenge in addressing an aging workforce is the long-term adjustment required to prepare new entrants and upgrade the less-skilled employed to replace retiring workers. Replacement demand will rise steadily each year over the scenario period and the annual challenge will be to bring forward qualified workers at the same pace. This is a critical lag here, as time is required for new entrants and unskilled workers to acquire needed skills and experience."


About 22 per cent of the current residential labour force is expected to retire by 2024. 



Written by Jim Adair


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