The Canadian Construction Association (CCA) recently released a 2019 industry trends report, in partnership with Abacus Data, looking at how builder behaviour is evolving in Canada. The report covers five key areas, that we’ll cover here in five quick minutes — workforce, technology, market forces, procurement and the future of associations. Read on to get the entirely unpacked and summarized CCA trends report as it matters to you!
Minute 1: Workforce
- Government and education are not doing enough to undo negative perceptions around careers in building, which means as older construction professionals retire, they aren’t being replaced by new generations of workers.
- As the labor shortage continues, project managers, estimators, and Building Information Modelling (BIM) specialists are likely to be the most needed and in-demand.
- The industry lacks diversity, especially with women and indigenous people, exacerbating the lack of labour available to complete construction projects in Canada.
- Slow technology adoption is making it harder for builder’s to get the job done with limited resources.
Minute 2: Technology
- New technologies that will continue to dominate the next decade of building include advanced software, building information modelling (BIM), 3D printing, drones and IoT for Construction (think remote-operation of machinery, equipment tracking and endless other possibilities).
- Canadian contractors don’t develop or use construction technology, as much as international markets.
- Construction contracts are often awarded to the lowest bidder, leaving little profit margin for companies to invest in technology advances.
- While technology won’t solve the labour shortage, Construct Canada notes that it will protect builders from falling behind, both in their ability to deliver jobs on time and amongst the industry overall.
Minute 3: Market Forces
- Current tariff and trade wars can complicate long-term planning.
- Smaller contracts are being amalgamated into larger projects which leaves less space in the market for smaller firms.
“Take a city like Toronto for instance. They used to divide a sewer renewal project up every few blocks, giving everyone a piece of the pie. Now, all the renewal is one big contract. It’s squeezing a lot of smaller guys out.”
- Excerpt from the CCA Industry Trends Report
- Large scale mega-projects attract international firms, which takes money away from Canadian firms.
- This trend may polarize the industry into two factions — small subcontractors and large general contractors — potentially pushing midsize firms out of the market.
Minute 3.5: Procurement
- Both large and small building firms identified the need for more time for adequate project assessment before quoting.
- Opportunities for contracts are emerging online more often, facilitating greater transparency between the owner and the builder.
- There is less of an emphasis on relationship-building and networking than there once was since electronic procurement portals are making these relationships less important.
Minute 4: The Future of Associations
- Associations protect and represent the small and medium industry players the most who are vulnerable in the rapidly-changing and uncertain times ahead.
- Associations are now more important than ever because they have the ability to act as a strong, unified voice for the industry and ensure information is centralized and accessible (like the report we’re covering right now!).
- Associations can lobby the government more effectively to create change for a better building market tomorrow.
Minute 5: What This Really Means for Builders
While the report at times paints a picture of an archaic Canadian industry still doing a lot by hand, as builders, we could easily argue that the industry has embraced massive innovation and change over the years. The difference is that the shift in innovation has been more focused at the product level, with the move to tools that help builders work faster and safer, like saws and nail guns. Innovation at the project management level is still slow.
Builders in Canada need to stop viewing change as a barrier. A shift towards adopting innovation instead of focusing on offering the lowest price is an opportunity to deliver greater value to clients.
Yes, Canada’s builder market is lacking technology, but this isn’t new or isolated to The Great White North. Under-digitization was reported as problematic in the U.S. 2018 market as well. Canadian builders who are looking for opportunities to adopt technology should focus on emerging technology trends like prefabrication and BIM, which are already popular throughout Asia and Europe.
Builder behaviour is changing, and understanding what this looks like is critical in order to stay competitive, attract new talent and move with the shifting marketplace. Reports like this one from CCA offer a wealth of data on builder behaviour to help identify trends in order to plan and forecast for the future (so become a member if you’re not already!). A willingness to be agile and move with the changing trends is how builders can continue to evolve and position themselves for continued success in the future.