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Ontario’s Construction Outlook

Ontario’s Construction Outlook. Sean W. Strickland Chief Executive Officer. Ontario’s Economy. Source: RBC, TD, Scotia Bank, BMO, CIBC. Inflation. Source: RBC, TD, Scotia Bank, BMO, CIBC. Ontario’s Economy. Source: RBC, TD, Scotia Bank, BMO, CIBC. Building Permits.

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Ontario’s Construction Outlook

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  1. Ontario’s Construction Outlook Sean W. Strickland Chief Executive Officer

  2. Ontario’s Economy Source: RBC, TD, Scotia Bank, BMO, CIBC

  3. Inflation Source: RBC, TD, Scotia Bank, BMO, CIBC

  4. Ontario’s Economy Source: RBC, TD, Scotia Bank, BMO, CIBC

  5. Building Permits

  6. Ontario Building Permits Ontario year-end total - 2008

  7. Building Permits

  8. Weaker Commercial & Industrial Key Factors • Low commodity prices • Weak US demand • Declining Canadian demand • Automotive sector meltdown • Declining consumer confidence • Declining employment • Increasing vacancy rates

  9. StrengtheningInstitutional Outlook • Government stimulus • Backlog of infrastructure projects

  10. Federal Stimulus Immediate Action to Build Infrastructure • $30 billion over the next two fiscal years in construction investment (federal budget plus provincial/municipal leveraging) • $17 billion of construction projects can take place in 2009 followed by another $13 billion in 2010 • Ontario’s share is $11 billion ($5.5 from the feds, matched by the province)

  11. ‘Shovel Ready’

  12. Truly ‘Shovel Ready’ projects

  13. Federal Stimulus

  14. Outlook for Ontario& The Regions

  15. Ontario Outlook – Non Residential Stimulus Source: C4SE

  16. Eastern Ontario Outlook - Cautiously Optimistic

  17. Central Ontario Outlook –Concerned / Optimism

  18. Southwestern Ontario Outlook - Deflated

  19. Northern Ontario Outlook – Thin Ice

  20. Greater Toronto Area Outlook – Strength in Diversity

  21. Annual Business Conditions Survey

  22. A Strong 2008 for Ontario’s Contractors 45% of contractors indicated they conducted more work in 2008 than 2007 Q4. Thinking about the total amount of business your firm conducted in 2008, would you say that your firm conducted more business, less business or about the same amount of business compared to 2007? PROBE: Is that much more/less or somewhat more/less Base: All respondents n=1043, Unionized n=276, Non-unionized n=755

  23. Regional Differences in Perceptions of Availability of Skilled Construction Workers • 47% of contractors rated availability of skilled construction workers as very good or somewhat good • Contractors in Eastern and Northern Ontario were more likely to rate availability of skilled construction workers as very poor or somewhat poor

  24. Future Employment Outlook 16% of contractors expect to employ more people in 2009 30% of contractors expect to employ fewer people in 2009

  25. Business Outlook for 2009 20% contractors feel their business will grow in 2009 38% contractors feel they will conduct less business in 2009

  26. Contractors Confident of the Overall Financial Health Overall Rating of Financial Health 75% of contractors rated their overall financial health as strong or very strong Q3. How would you describe your firm’s overall financial health?

  27. Risks and Opportunities • The proposed federal spending and related provincial municipal participation will prompt purchases of a wide range of goods and services, including the following: • Opportunities: • Traditional building materials (concrete, wood, steel, plastics, roofing, asphalt, etc.) • Design, engineering and architecture services • Information and communication technology • Fixtures, furniture and appliances • Energy-efficient and environmentally friendly products • Government regulatory, administrative and support services

  28. Construction Labour Markets

  29. Labour Market Information ProgramConstruction Sector Council • Develop and validate labour market information for the construction industry in Canada • Provincial committees guide the development of construction industry investment forecast and labour market implications • Provincial committees identify and address issues within their respective jurisdictions • Annual report released in June

  30. Construction Labour Markets Recession: 2009 - 2011 • Recession and fiscal stimulus dominate the markets • New residential and industrial construction down • Residential renovation, institutional and engineering up • Construction is headed for a soft landing • Employment will decline modestly in 2009, recover in 2010 and then drop again in 2011

  31. Construction Labour Markets Recovery: 2012 + • Non-residential construction leads • Recovery driven by major projects (Power Generation) • Residential gains some momentum due to migration • Age profiles and retirements create some tight markets

  32. Construction Labour Markets Recovery: 2012 + • Age profile and retirements tighten markets for: • Bricklayers • Estimators; Supervisors; Managers • Millwrights • Crane Operators • Heavy Equipment Mechanics • Residential Home Builders and Renovators • Truck Drivers • Welders

  33. www.ocsconex.com www.iciconstruction.com www.madewiththetrades.com

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