construction & maintenance looking forward quebec · labour market information (lmi) system...

ENGINEERING MAINTENANCENON-RESIDENTIALINVESTMENT

ICI BUILDINGRENOVATIONS MAINTENANCERESIDENTIALINVESTMENT

NEW HOUSING

BuildForce Canada uses a scenario-based forecasting system to assess future labour market conditions in both residential and non-residential construction. This labour market information (LMI) system tracks measures for 34 trades and occupations. BuildForce consults with industry, including owners, contractors and labour groups, to validate the scenario assumptions and construction project lists, and seeks input from government on related analysis. The system distills labour market conditions into ranks to provide signals to industry employers.

BuildForce’s LMI System

4.8% 0.7%3.3% 2.2%1.4% 1.5%0.8% -0.5%

CONSTRUCTION & MAINTENANCE LOOKING FORWARD

QUEBECRising retirements dominate hiring requirements

HIGHLIGHTS2017–2026

10-YEAR WORKFORCE OUTLOOK FOR QUEBEC

The 2017 Construction and Maintenance Looking Forward outlook for Quebec projects moderate changes in construction employment across the 2017–2026 scenario period, although the residential and non-residential sectors diverge. Construction employment in the province has been experiencing modest declines since 2013, largely related to a down-cycle in new housing and major project completions. Momentum shifts in 2017 with the start of a modest up-cycle in non- residential activity, which is expected to peak in 2019, while residential continues to track downward. Projected retirements are significant and will be a key driver of hiring requirements over the next decade.

DISTRIBUTION OF CONSTRUCTION EMPLOYMENT IN 2017, QUEBEC

2026

2017

2017 SECTOR INVESTMENT GROWTH OUTLOOK FOR QUEBEC (% change)

2017

34,70045,500

1,500 (-0.9%)

NEW ENTRANTS

RETIREMENTS

EMPLOYMENTCHANGE

HIGHLIGHTS ■ Continued declines in housing starts weaken residential employment over the scenario period, despite year-over-year gains in renovation activity; a further loss of residential construction jobs is anticipated.

■ Engineering activity is expected to rise to a cyclical peak in 2019 and then recede as major engineering projects wind down.

■ Sustained industrial, commercial and institutional (ICI) building and growth in maintenance demands maintain workforce requirements above current levels over the latter half of the decade.

■ Slower population growth and the anticipated retirement of 45,500 workers combine to create potential recruiting challenges, even during periods of moderate changes in construction activity.

NON-RESIDENTIALMAINTENANCE

ENGINEERING

RESIDENTIAL

INDUSTRIAL,COMMERCIAL,

INSTITUTIONAL (ICI)

AVERAGEUNEMPLOYMENT RATE 9.0%

2 QUEBEC – HIGHLIGHTS 2017–2026

QUEBEC – CONSTRUCTION AND MAINTENANCE LOOKING FORWARD

QUEBEC CONSTRUCTION OUTLOOKThe 2017 Construction and Maintenance Looking Forward outlook for Quebec projects offsetting trends in residential and non-residential requirements maintaining overall employment near current levels across the 2017–2026 scenario period.

Quebec’s construction industry experienced tremendous growth over much of the last decade, adding nearly 60,000 new jobs between 2009 and the peak in 2013. Slowing population growth has translated into declines in household formations1 and new housing starts since 2010. This trend is expected to continue over the coming decade, with lower levels of housing starts and resi-dential employment. Steady growth in renovation activity partially offsets weaker new housing construction and becomes the domi-nant source of residential employment over the long term.

Non-residential investment was down in 2016 with the completion of major engineering projects and declining ICI building activity. This trend is expected to reverse in 2017 when non-residential becomes the leading source of new jobs over the 10-year scenario period. The anticipated timing of planned projects sees engineering activity rise to 2019, before receding as major engineering projects wind down.

Retirements have recently begun to consistently outpace new entrants in Quebec, signalling a change in the traditional patterns of recruitment to meet labour requirements. BuildForce estimates that 45,500 workers are expected to retire across the scenario period becoming a key focus of recruitment requirements.

SECTOR INSIGHTSThe following sections provide sector-specific insights into the non-residential and residential labour markets. The 2017 BuildForce LMI system provides an overview of market drivers and detailed occupational demand- and supply-side analysis of labour market conditions in each sector for 34 trades and occupations tracked by BuildForce.

NON-RESIDENTIAL SECTOR

A period of modest growth in non-residential employment is anticipated to begin in 2017, driven by rising demands from both engineering and ICI building construction. Steady increases in ICI building investment and rising infrastructure and road, highway and bridge work requirements are expected to increase non-residential employment by almost 9 percent, or 8,300 jobs through 2026, with gains more concentrated between 2017 and 2019.

Figure 1 tracks the change in non-residential employment by sector for key reference points across the scenario period, including the start in 2017 and then at the end of the period in 2026.

The largest gains are related to engineering construction, includ-ing utility, pipeline, highway and bridge projects between 2018 and 2022. Once major project demands subside, steady levels of commercial and institutional activity and rising non-residential maintenance requirements are expected to sustain workforce requirements over the latter half of the scenario period.

Table 1 summarizes the percent change in employment by sector across two periods: the first captures the expected rise over the next five years to 2021 and the second, the remainder of the period to 2026.

Figure 2 shows the employment trends by sector for non-residential construction.

Source: Statistics Canada, BuildForce Canada

Total non-residential employment 7% 1.6%

ICI

Industrial 8% -3%

Commercial, institutional and government

7% 2%

Engineering

Highways and bridges -9% 0%

Heavy industrial 23% 4%

Other engineering 5% -5%

Maintenance 3% 3%

Table 1: Change in non-residential employment by sector, Quebec

SECTOR % CHANGE 2017–2021

% CHANGE 2022–2026

1 Household formation refers to the change in the number of households (persons living under one roof or occupying a separate housing unit) from one year to the next. It is the means by which population growth is transformed into demand for new housing.

QUEBEC – HIGHLIGHTS 2017–2026 3

CONSTRUCTION AND MAINTENANCE LOOKING FORWARD – QUEBEC

Figure 1: Non-residential employment distribution by sector, Quebec, 2017 and 2026

MAINTENANCE

HEAVYINDUSTRIAL

HIGHWAYS &BRIDGES

COMMERCIAL &INSTITUTIONAL

OTHER ENGINEERING

INDUSTRIAL

START END


2026 2017

96,700 102,800

24%

18%

9%

29%

9%

12%

24%

20%

9%

29%

8%9%


Figure 2: Non-residential construction employment growth outlook, Quebec

Maintenance Total industrial, commercial, institutional (ICI) Engineering

100,000

80,000

60,000

20,000

40,000

120,000



Source: BuildForce Canada

THE AVAILABLE WORKFORCE

The Quebec population is growing, but natural population growth (births minus deaths) is slowing. Immigration will continue to be an important source of labour supply over the next decade. The construction industry will need to draw from immigration and other markets to recruit the needed workforce.

The BuildForce LMI system tracks supply and accounts for the change in the available labour force, including retirements, new entrants and net in-mobility . The retirement of 26,100 workers is expected over the next decade, compared to just over 21,600 first-time new entrants estimated to be drawn into the construction workforce from the local population aged 30 and younger. This leaves a gap in recruitment, which will need to be filled by attract-ing workers from other sectors or regions into construction.

Table 2 provides a summary of changes in the non-residential workforce in 2016, the five-year period between 2017 and 2021 and across the full scenario period.

The BuildForce ranking system isolates market conditions specific to non-residential construction. The results are summarized in in Table 3.

NON-RESIDENTIAL RANKINGS, RISKS AND MOBILITY

BuildForce assesses market conditions for 34 construction trades and occupations using a ranking system that combines measures of the change in employment, unemployment, net in-mobility and adjustments based on industry input. The rank-ings reflect non-residential market conditions unique to Quebec based on current and proposed construction activity. In addition, assumptions on provincial economic and population growth, new entrants to the labour force and migration patterns (inter-provincial and international) are built into the forecast scenario and included in the ranking assessment.

The rankings for some trades working in the non-residential sector are suppressed due to the small size of the workforce (<100 workers) and limited statistical reliability when assessing labour market conditions at the sector level. Trades may also be excluded because they typically do not work in the sector being assessed (e.g., home building and renovation managers in non-residential). For Quebec, non-residential rankings are reported for 32 trades and occupations.

Table 3 provides non-residential rankings for Quebec, showing generally balanced labour markets, signalled by a rank of 3. Replacement demands are significant over the next 10 years. It is assumed that industry manages demand requirements and workforce availability through established promotion and train-ing programs.

2 New entrants are measured by applying the traditional proportion of the provincial workforce that enters the construction industry. The projected estimate across the scenario period assumes that the construction industry is able to recruit this group in competition with other industries.

3 In-mobility refers to the arrival of workers from outside the local construction industry. In-mobility includes the interprovincial employee workforce described above. Many members of this group will move quickly out of the province as work declines and this out-mobility, even if it is a very short-term change, signals a weak market.

Employment -3,700 6,700 8,300

DemandLabour force change -7,300 5,200 6,000

Retirements -2,500 -13,000 -26,100

SupplyNew entrants 2,000 10,400 21,600

Net mobility -6,800 7,800 10,500

2016 5 years 2017–2021NON-RESIDENTIAL WORKFORCE ADJUSTMENT

10 years 2017–2026

Table 2: Change in the non-residential workforce, Quebec



NON-RESIDENTIAL HIGHLIGHTS

■ Overall employment rises by 9 percent, adding 8,300 construction jobs through 2026.

■ Stable levels of institutional and commercial building construction and rising maintenance activity sustain employment after 2022.

■ Engineering construction accounts for more than half of new jobs from 2017 to 2026, reaching peak levels in 2019.

MARKET RANKINGS

Needed workers meeting employer qualifications are not available in local markets to meet current demand so that projects or production may be delayed or deferred. There is excess demand, competition is intense and recruiting reaches to remote markets.

Workers meeting employer qualifications are generally not available in local markets to meet any increase. Employers will need to compete to attract additional workers. Recruiting and mobility may extend beyond traditional sources and practices.

The availability of workers meeting employer qualifications in the local market may be limited by large projects, plant shutdowns or other short-term increases in demand. Employers may need to compete to attract needed workers. Established patterns of recruiting and mobility are sufficient to meet job requirements.

Workers meeting employer qualifications are available in local markets to meet an increase in demand at the current offered rate of compensation and other working conditions.

Workers meeting employer qualifications are available in local markets to meet an increase in demand at the current offered rate of compensation and other current working conditions. Excess supply is apparent and there is a risk of losing workers to other markets.

The labour market assessment for some trades is limited by the small size of the workforce (<100 employed). In consultation with the provincial LMI committee, the rank is suppressed because of limited statistical reliability.




Boilermakers 3 3 3 3 3 3 3 3 3 3 3

Bricklayers 3 3 3 3 3 3 3 3 3 3 3

Carpenters 3 3 3 3 3 3 3 3 3 3 3

Concrete finishers 3 3 3 3 3 3 3 3 3 3 3

Construction estimators 2 3 3 4 2 3 3 3 3 3 3

Construction managers 2 4 3 4 3 3 3 3 3 3 3

Construction millwrights and industrial mechanics 3 3 3 3 3 3 3 3 3 3 3

Contractors and supervisors 2 3 3 4 3 3 3 3 3 3 3

Crane operators 3 3 3 3 3 3 3 3 3 3 3

Drillers and blasters 3 3 3 3 3 3 3 3 3 3 3

Electrical power line and cable workers 3 3 3 3 3 3 3 3 3 3 3

Electricians 3 3 3 3 3 3 3 3 3 3 3

Elevator constructors and mechanics 3 3 3 3 3 3 3 3 3 3 3

Floor covering installers 3 3 3 3 3 3 3 3 3 3 3

Gasfitters 3 3 3 3 3 3 3 3 3 3 3

Glaziers 3 3 3 3 3 3 3 3 3 3 3

Heavy equipment operators (except crane) 3 3 3 3 3 3 3 3 3 3 3

Heavy-duty equipment mechanics 3 3 3 3 3 3 3 3 3 3 3

Insulators 3 3 3 3 3 3 3 3 3 3 3

Ironworkers and structural metal fabricators 3 3 3 3 3 3 3 3 3 3 3

Painters and decorators (except interior decorators) 3 3 3 3 3 3 3 3 3 3 3

Plasterers, drywall installers and finishers and lathers 3 3 3 3 3 3 3 3 3 3 3

Plumbers 3 3 3 3 3 3 3 3 3 3 3

Refrigeration and air conditioning mechanics 3 3 3 3 3 3 3 3 3 3 3

Residential and commercial installers and servicers 2 3 3 3 3 3 3 3 3 3 3

Roofers and shinglers 3 3 3 3 3 3 3 3 3 3 3

Sheet metal workers 3 3 3 3 3 3 3 3 3 3 3

Steamfitters, pipefitters and sprinkler system installers 3 3 3 3 3 3 3 3 3 3 3

Tilesetters 3 3 3 3 3 3 3 3 3 3 3

Trade helpers and labourers 3 3 3 3 3 3 3 3 3 3 3

Truck drivers 3 3 3 3 3 3 3 3 3 3 3

Welders and related machine operators 3 3 3 3 3 3 3 3 3 3 3

Table 3: Non-residential market rankings, Quebec

TRADES AND OCCUPATIONS - NON-RESIDENTIAL 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016



RESIDENTIAL SECTOR

A persistent decline in residential activity saw housing starts fall by 30 percent from peak levels reached in 2010. This downward trend extends over the 2017–2026 scenario period with a marked decel-eration after 2021. Renovation activity, however, is tied to an older housing stock and rises across the period.

The pace of declines slowed in 2016 and activity is expected to remain mostly unchanged in 2017. The downward trend accelerates in 2018, resulting in an estimated loss of 9,800 jobs related to new housing by the end of the scenario period in 2026. A large renova-tion and maintenance market rises, adding nearly 700 jobs across the decade, partially offsetting the decline in new housing.

Overall, total residential employment contracts by 13 percent between 2017 and 2026. Figure 3 shows the employment trends by sector for residential construction.

THE AVAILABLE WORKFORCE

Residential employment declines across the scenario period, but industry will need to remain focused on addressing an aging work-force and replacing workers expected to retire.

Table 4 provides a summary of the estimated changes in the residential workforce in 2016, the five-year period between 2017 and 2021 and across the full 2017–2026 scenario period. The retirement of 19,300 workers are expected over the next decade, compared to just over 13,100 first-time new entrants estimated to be drawn into the construction workforce from the local population aged 30 and younger. An estimated 6,600 workers, however, are expected to leave the residential sector for opportunities in other regions or sectors.

RESIDENTIAL HIGHLIGHTS

■ An anticipated decline in population growth and aging demo-graphics is expected to slow the demand for new housing. Housing starts are anticipated to fall by half compared to the peak levels in 2010.

■ A steady rise in renovation activity, a key source of residential employment, adds nearly 700 jobs over the decade, partially offsetting new housing declines.

■ Total residential employment contracts by 13 percent, or 9,800 jobs over the scenario period.


Figure 3: Residential construction employment growth outlook, Quebec

Maintenance Renovations New housing

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000




Boilermakers 3 3 3 3 3 3 3 3 3 3 3

Bricklayers 3 3 3 3 3 3 3 3 3 3 3

Carpenters 3 3 3 3 3 3 3 3 3 3 3

Concrete finishers 3 3 3 3 3 3 3 3 3 3 3

Construction estimators 2 3 2 3 3 3 3 3 3 3 3

Construction managers 3 3 2 3 3 3 3 3 3 3 3

Construction millwrights and industrial mechanics 3 3 3 3 3 3 3 3 3 3 3

Contractors and supervisors 3 3 3 3 3 3 3 3 3 3 3

Crane operators 3 3 3 3 3 3 3 3 3 3 3

Drillers and blasters 3 3 3 3 3 3 3 3 3 3 3

Electrical power line and cable workers 3 3 3 3 3 3 3 3 3 3 3

Electricians 3 3 3 3 3 3 3 3 3 3 3

Elevator constructors and mechanics 3 3 3 3 3 3 3 3 3 3 3

Floor covering installers 3 3 3 3 3 3 3 3 3 3 3

Gasfitters 3 3 3 3 3 3 3 3 3 3 3

Glaziers 3 3 3 3 3 3 3 3 3 3 3

Heavy equipment operators (except crane) 3 3 3 3 3 3 3 3 3 3 3

RESIDENTIAL RANKINGS, RISKS AND MOBILITY

Table 5 shows generally balanced residential labour markets across the scenario period, signalled by a rank of 3. The continuing, but moderate, declining trend in residential employment is partially off-set by rising retirements.

The rankings for some trades working in the residential sector are suppressed due to the small size of the workforce (<100 workers) and limited statistical reliability when assessing labour market con-ditions at the sector level. Trades may also be excluded because they typically do not work in the sector being assessed (e.g., boil-ermakers, millwrights, etc. in residential construction). For Quebec, residential rankings are reported for 32 trades and occupations.

continued on next page

Employment -700 -6,100 -9,800

DemandLabour force change -3,600 -8,100 -12,800

Retirements -1,900 -9,800 -19,300

SupplyNew entrants 1,400 6,600 13,100

Net mobility -3,100 -4,900 -6,600

2016 5 years 2017–2021RESIDENTIAL WORKFORCE ADJUSTMENT

10 years 2017–2026

Table 4: Changes in the residential workforce, Quebec

Table 5: Residential market rankings, Quebec

TRADES AND OCCUPATIONS - RESIDENTIAL 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016




Heavy-duty equipment mechanics 3 3 3 3 3 3 3 3 3 3 3

Home building and renovation managers 3 3 3 3 3 3 3 3 3 3 3

Insulators 3 3 3 3 3 3 3 3 3 3 3

Ironworkers and structural metal fabricators 3 3 3 3 3 3 3 3 3 3 3

Painters and decorators (except interior decorators) 3 3 3 3 3 3 3 3 3 3 3

Plasterers, drywall installers and finishers and lathers 3 3 3 3 3 3 3 3 3 3 3

Plumbers 3 3 3 3 3 3 3 3 3 3 3

Refrigeration and air conditioning mechanics 3 3 3 3 3 3 3 3 3 3 3

Residential and commercial installers and servicers 3 3 3 3 3 3 3 3 3 3 3

Roofers and shinglers 3 3 3 3 3 3 3 3 3 3 3

Sheet metal workers 3 3 3 3 3 3 3 3 3 3 3

Steamfitters, pipefitters and sprinkler system installers 3 3 3 3 3 3 3 3 3 3 3

Tilesetters 3 3 3 3 3 3 3 3 3 3 3

Trades helpers and labourers 3 3 3 3 3 3 3 3 3 3 3

Truck drivers 3 3 3 3 3 3 3 3 3 3 3

TRADES AND OCCUPATIONS - RESIDENTIAL 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016

PLANNING FOR LABOUR MARKET CHALLENGES AMID MODEST GROWTH CYCLESQuebec’s construction labour markets are expected to be gener-ally balanced, although there is divergence in the residential and non-residential sectors. Despite sluggish growth, attracting and retaining qualified workers may pose challenges as labour markets adjust to changing demographics. Retirements (including mortal-ity) are expected to draw an estimated 45,500 workers from the construction industry over the next 10 years. Such a shift in the workforce creates the potential for a significant skill vacuum that requires proactive planning.

The province’s natural rate of population growth (births less deaths) continues to decline as a higher share of the population enter older age brackets. This trend suggests Quebec may need to depend on migration as the key driver of population growth. Historically, Quebec has consistently lost a share of its population to inter-provincial migration. Driven by sluggish economic growth in other provinces, Quebec is anticipated to retain a higher share of its population across the scenario period, maintaining relatively sta-ble population growth over the decade. Figure 4 shows the factors contributing to population growth in Quebec.

An aging population continues to be a source of concern for all Canadian provinces. Table 6 shows Quebec’s population age dis-tribution. By 2026, the share of the population in prime working age (25 to 54 years old) is expected to decline and at the same time the share of the population in older age brackets (65 years and over) is expected to increase. This trend indicates that the share of the population that is potentially exiting the labour force is increasing while the share of the population that is potentially entering the labour force is declining.


Table 6: Population age distribution (%), Quebec

0–14 15.6 16.1

15–24 11.3 10.0

25–54 40.7 38.2

55–64 14.4 12.7

65+ 18.0 23.0

2026AGES 2016

2026AGES 2016



POPULATIONGROWTH

BIRTHS DEATHS NETMIGRATION

AVERAGE AGE OFCONSTRUCTION

WORKFORCE

PERCENT OF CURRENTLABOUR FORCE LOST TO

RETIREMENT

10-YEAR AVERAGE BY 2026

0.6% 91,100 75,000 35,200 43 24%

the industry to acquire workers from outside of the province or from other industries, or find new ways to improve its share of new entrants.

Increasing the number of new entrants may require industry lead-ers to increase initiatives to engage underrepresented sources of labour, including Indigenous people and women, when targeting new entrants, which presents significant opportunities.

Canada’s Indigenous population has the country’s highest rate of population growth and a higher propensity to choose construction as their career choice. An estimated 11 percent of all Indigenous people in Canada reside in Quebec and currently account for about 1.3 percent of the construction workforce in the province.

Figure 4: Sources of population growth (%), Quebec

Source: Statistics Canada, BuildForce Canada (2016–2026)

Increase due to natural growth (births less deaths) Increase due to net in-migration Total population growth

-0.2

0.2

-0.4

-0.6

0.4

0.6

0.8

1.2

1

1.4

Labour force participation by older individuals is much lower than for those in their prime working years. As a considerable share of the population moves into the older age brackets, the labour force participation rate (percent of the population 15 years and older in the labour force) is expected to fall steadily.

As the construction industry workforce continues to age, industry stakeholders may need to find alternative sources of labour to fill the gap of retiring workers.

Based on historical hiring trends, the province’s construction indus-try is expected to draw an estimated 34,700 first-time new entrants from the local population, aged 30 and younger, over the next 10 years. In the scenario period, the retiring workforce exceeds the youth coming into the industry. Such market pressure may require

MANITOBA – HIGHLIGHTS 2017–2026 11

CONSTRUCTION AND MAINTENANCE LOOKING FORWARD – MANITOBA

Timely construction forecast data is available online at constructionforecasts.ca. Create customized reports on a broad range of selected categories within sector, trade or province covering up to 10 years.

For more information, contact:

Phone: 613.569.5552 I [email protected]

The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada

Funded by the Government of Canada’s Sectoral Initiatives Program

JANUARY 2017

Across the scenario period, Quebec’s female population is expected to grow faster than their male counterparts. The prov-ince’s construction workforce is made up of approximately 10 percent women, of which about 15 percent work directly on con-struction projects, while the remaining 85 percent work in support or office-related occupations in the construction industry. This translates into women representing 2.1 percent of the province’s direct construction workforce.

CONCLUSIONS AND IMPLICATIONS

Construction requirements have been declining steadily since the peak levels reached in 2013. The divergence of residential and non-residential employment requirements in 2017 marks the start of a slower growth outlook for construction employment in Quebec, but the changing nature of employment requirements is expected to shift between sectors over the scenario period.

Major resource, institutional and infrastructure projects sustain employment for many non-residential trades early in the period, but then decline as major projects wind down. Across the decade, residential construction employment declines as new housing activity slows.

Divergences between residential and non-residential employ-ment may create opportunities for mobility in the workforce across the sectors.

The industry scenario-based approach developed by BuildForce Canada to assess future labour market conditions provides a powerful planning tool for industry, government and other stake-holders to better track labour market conditions and identify potential pressure points. The anticipated labour market conditions reflect the current industry expectations of economic growth and assumptions about immigration to the province. Any changes to these assumptions presents risks and potentially alters anticipated market conditions.

construction & maintenance looking forward quebec · labour market information (lmi) system...

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