A Post-sustainability World Alex Carrick, Chief Economist

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1 A Post-sustainability World Alex Carrick, Chief Economist

2 Canada All ew Construction by Region (Current Canadian $ illions) Atlantic 12,699 13,639 14,581 15,713 16,687 17,995 17,476 17,072 17,723 18,566 19,810 Québec 39,495 42,315 44,831 48,609 47,173 45,061 44,130 46,411 47,816 49,502 52,617 Ontario 59,446 68,350 71,183 75,653 74,043 79,066 85,317 89,236 90,507 93,471 99,217 anitoba 6,680 7,715 7,660 8,048 8,108 9,048 9,919 10,093 10,621 11,159 11,900 askatchewan 10,237 12,361 13,731 15,516 16,702 18,595 14,197 12,028 12,519 13,111 13,978 Alberta 43,462 58,048 65,293 74,741 88,070 92,659 72,382 63,715 65,919 69,103 73,707 British Columbia 29,176 31,310 32,258 35,962 35,084 38,577 38,870 39,710 40,607 42,007 44,652 Total 201, , , , , , , , , , ,881 % Change 16.2% 6.8% 9.9% 4.2% 5.3% -6.2% -1.4% 2.7% 3.9% 6.4% (Year vs Previous Year) 2009 to 2015 are from tatistics Canada; 2016 are CanaData estimates (largely based on the CARE survey); 2017 on are CanaData forecasts.. Table: CanaData ConstructConnect. 2

3 Canada ew Engineering Construction by Region (Current Canadian $ illions) Atlantic 5,634 5,553 5,629 6,574 8,438 10,328 9,928 10,222 10,811 11,556 12,400 Québec 12,683 12,848 14,853 16,606 15,783 13,022 12,890 15,097 16,058 17,214 18,472 Ontario 12,767 16,396 15,158 16,299 15,179 19,082 20,863 20,148 21,595 23,258 24,959 anitoba 3,322 4,025 3,712 3,484 3,217 3,886 4,870 5,653 6,110 6,569 7,049 askatchewan 6,333 8,073 8,969 9,601 10,855 12,630 8,860 6,644 7,027 7,511 8,060 Alberta 21,909 34,330 42,904 49,060 61,537 62,432 41,610 37,062 38,971 41,577 44,616 British Columbia 10,342 11,876 12,316 14,855 13,979 16,560 15,180 12,989 14,040 15,065 16,166 Total 72,991 93, , , , , , , , , ,722 % Change 27.5% 11.2% 12.5% 10.7% 6.9% -17.2% -5.6% 6.3% 7.1% 7.3% (Year vs Previous Year) 2009 to 2015 are from tatistics Canada; 2016 are CanaData estimates (largely based on the CARE survey); 2017 on are CanaData forecasts.. Table: CanaData ConstructConnect. 3

4 Billions of current Cdn. dollars (monthly figure at annual rate) Canada's Foreign Trade: The erchandise Trade Balance uly 2016 $100 $75 $50 $25 $0 -$25 -$50 Year and onth Analysis of Canada's foreign trade position usually focuses on the erchandise Trade Balance which is goods exports minus goods imports.. Data source: tatistics Canada / Chart: CanaData ConstructConnect. 4

5 Index of Employment (an = 100.0) Construction Employment, U.. and Canada ince anuary Canada U Year and onth Value in anuary 2010 set equal to 100.0; value in each following month expressed relative to anuary Data sources: U.. Bureau of Labor tatistics and tatistics Canada / Chart: CanaData ConstructConnect. 5

6 Index of Employment (an 2010 = 100.0) anufacturing Employment, U.. and Canada ince anuary U Canada 95.0 Year and onth Value in anuary 2010 set equal to 100.0; value in each following month expressed relative to anuary Data sources: U.. Bureau of Labor tatistics and tatistics Canada / Chart: CanaData ConstructConnect. 6

7 Index of Employment (an = 100.0) Total Employment, U.. and Canada ince anuary U Canada Year and onth Value in anuary 2010 set equal to 100.0; value in each following month expressed relative to anuary Data sources: U.. Bureau of Labor tatistics and tatistics Canada / Chart: CanaData ConstructConnect. 7

8 Ten Talking Points 1) till Rising China; 2) Deeply Conflicted/Confused Electorates; 3) Aging Populations ( Worry Factor); 4) Rock tar Central Bankers; 5) egative Interest Rates/Cashless ociety; 6) Data streaming/vr/ai Entertainment Topsy-turvy; 7) Construction cene in Flux (e.g., micro power generation/driverless cars); 8) ustainability in all things; 9) Logistics Rule; 10) Genetic Engineering. 8

9 Logistics Rule The subject of logistics concerns the movement of goods and people. That s pretty much the purpose behind building infrastructure. The push for both hard (i.e., roads, sewers, pipelines, etc.) and soft (schools and hospitals) infrastructure largely comes down to striving for productivity enhancements. Infrastructure Logistics Productivity Enhancements 9

10 A Righteous Circle Productivity Enhancements Logistics Infrastructure 10

11 Ways in which Goods and People being oved Differently Driverless cars; icro power generation; Digital downloads; Aerial drones; aglev elevators and hyperloops. 11

12 oft Infrastructure A major portion of the need for soft infrastructure is to supply the brains (through educational facilities) and the healthy workers (medical facilities) to create and keep running the whole super-complicated logistics apparatus. 12

13 Canadian Provincial Labour arkets August 2016 Unemployment rate Employment (000s) Province Aug 2015 Aug 2016 Aug 2015 Aug 2016 et % change ewfoundland and Labrador 11.7% 12.3% % Prince Edward Island 10.5% 12.1% % ova cotia 8.4% 8.5% % ew Brunswick 9.8% 9.4% % Québec 8.0% 7.1% 4, , % Ontario 6.8% 6.7% 6, , % anitoba 5.7% 5.9% % askatchewan 4.8% 6.3% % Alberta 6.1% 8.4% 2, , % British Columbia 6.2% 5.5% 2, , % Canada 7.0% 7.0% 17, , % Data source (seasonally adjusted figures) tatistics Canada / Table: CanaData ConstructConnect. 13

14 Ranking of ajor Canadian Cities By year-over-year employment change (highest to lowest) By latest unemployment rate (lowest to highest) Aug 2016 vs Aug 2015 August Oshawa, O 14.5% 2 Vancouver, BC 6.3% 3 Windsor, O 5.6% 4 Thunder Bay, O 3.2% 4 Trois-Rivières, QC 3.2% 6 Victoria, BC 3.1% 7 t. ohn s, L 2.8% 8 Brantford, O 2.4% 8 Regina, K 2.4% 10 Kitchener, O 1.9% 10 oncton, B 1.9% 12 Halifax, 1.6% 13 Ottawa-Gatineau, O-QC 1.2% 14 Abbotsford, BC 0.3% 14 ontréal, QC 0.3% 16 Toronto, O 0.2% 17 Kingston, O 0.1% 18 udbury, O -0.1% 19 Winnipeg, B -0.2% 20 askatoon, K -0.4% 21 herbrooke, QC -0.7% 22 Edmonton, AB -0.9% 23 aguenay, QC -1.1% 24 Québec City, QC -1.2% 25 Guelph, O -1.9% 26 Calgary, AB -2.4% 27 t. Catharines-iagara, O -2.7% 28 aint ohn, B -3.2% 29 Hamilton, O -3.4% 30 London, O -3.6% 31 Kelowna, BC -4.3% 32 Peterborough, O -5.5% 33 Barrie, O -7.1% Canada 0.4% 1 Québec City, QC 4.7% 1 Victoria, BC 4.7% 3 Guelph, O 5.0% 4 Vancouver, BC 5.2% 5 Kingston, O 5.3% 6 Regina, K 5.5% 7 Halifax, 5.6% 8 Kitchener, O 5.7% 9 herbrooke, QC 5.8% 10 Abbotsford, BC 6.0% 11 Brantford, O 6.1% 11 Peterborough, O 6.1% 11 Windsor, O 6.1% 14 Hamilton, O 6.2% 15 Thunder Bay, O 6.3% 16 Ottawa-Gatineau, O-QC 6.5% 16 askatoon, K 6.5% 16 Toronto, O 6.5% 16 Winnipeg, B 6.5% 20 aguenay, QC 6.7% 20 t. ohn s, L 6.7% 20 Trois-Rivières, QC 6.7% 23 t. Catharines-iagara, O 6.8% 24 Oshawa, O 6.9% 25 London, O 7.2% 25 oncton, B 7.2% 27 Kelowna, BC 7.4% 28 aint ohn, B 7.7% 29 ontréal, QC 7.8% 29 udbury, O 7.8% 31 Edmonton, AB 8.0% 32 Barrie, O 8.7% 33 Calgary, AB 9.0% Canada 7.0% Data source: tatistics Canada (Cansim ) / Tables: CanaData ConstructConnect. 14

15 Provinces Key Product Exports % Change, an-ul 2016 versus an-ul 2015 ewfoundland & Labrador: Energy products -26.0% Quebec: etals & minerals -11.4% Forestry products 5.5% Aerospace products -15.1% Consumer goods 12.4% Ontario: etals & minerals -5.4% Petrochemical products -2.0% Industrial achinery 3.8% otor vehicles & parts 18.2% Consumer goods 8.3% askatchewan: Farm products -6.3% Energy products -45.6% etals & minerals -31.4% Alberta: Energy products -30.7% Petrochemical products -6.5% British Columbia: Energy products -15.2% Forestry products 5.8% Data source: tatistics Canada. Table: CanaData ConstructConnect. 15

16 Canada Type-of-tructure Forecasts ($ Billions CAD) Actuals Forecasts ingle-family ulti-family TOTAL REIDETIAL (Yr/yr % change) 9.1% 0.8% 0.2% 2.7% 4.1% 4.2% 3.6% Hotels/otels Private Offices Govenmental Offices hopping/retail Retail iscellaneous Parking Garages Amusement Warehouses TOTAL COERCIAL (Yr/yr % change) -20.4% 12.8% -8.3% 7.5% 4.3% 3.6% 2.4% TOTAL IDUTRIAL (manufacturing) (Yr/yr % change) 64.6% -55.2% -31.1% 51.9% 16.6% 14.5% 8.2% Religious Hospitals/Clinics ED misc Transportation Terminals Police,Fire Educational Facilities TOTAL ITITUTIOAL (Yr/yr % change) 2.2% 40.2% -18.1% 14.3% 7.5% 5.4% 4.7% TOTAL O-RE BUILDIG (Yr/yr % change) -6.4% 15.0% -14.0% 12.3% 6.4% 5.0% 3.8% Bridges Dams/Canal/arine Water & ewage Treatment Roads Power Infrastructure All Other Civil (Oil & Gas etc.) TOTAL EGIEERIG (Yr/yr % change) 23.1% -27.2% -10.0% 11.4% 12.9% 9.7% 9.2% TOTAL O-REIDETIAL (Yr/yr % change) 14.6% -17.2% -11.4% 11.7% 10.8% 8.3% 7.6% GRAD TOTAL (Yr/yr % change) 13.1% -12.6% -7.9% 8.7% 8.8% 7.1% 6.5% ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 16

17 Canada Type-of-tructure Forecasts Actuals Forecasts ingle-family -8.8% 4.9% 1.4% 4.6% 6.2% 5.3% ulti-family 12.0% -4.2% 3.9% 3.5% 2.1% 1.8% TOTAL REIDETIAL 0.8% 0.2% 2.7% 4.1% 4.2% 3.6% Hotels/otels 163.7% -24.2% 5.9% 0.2% -1.9% -5.8% Private Offices 16.2% -16.7% 7.5% 2.4% 2.6% 2.1% Govenmental Offices -7.2% 4.2% 4.1% 4.2% 2.7% 2.4% hopping/retail -35.1% -5.6% 6.8% 6.8% 6.2% 5.0% Retail iscellaneous 61.2% -7.8% 16.1% 8.9% 5.4% 3.0% Parking Garages 82.9% 4.5% 4.5% 4.2% 3.3% 3.1% Amusement 28.6% -3.4% 10.5% 5.6% 5.2% 3.4% Warehouses 22.7% -1.0% 5.5% 4.3% 4.8% 3.8% TOTAL COERCIAL 12.8% -8.3% 7.5% 4.3% 3.6% 2.4% TOTAL IDUTRIAL (manufacturing) -55.2% -31.1% 51.9% 16.6% 14.5% 8.2% Religious 29.8% -12.2% 11.3% 4.5% 4.0% 3.7% Hospitals/Clinics 67.9% -29.3% 32.9% 13.8% 11.3% 11.1% ED misc 40.8% 2.1% 8.4% 4.2% 3.4% 2.3% Transportation Terminals 101.0% -21.3% 31.5% 12.4% 5.0% 3.4% Police,Fire -48.9% 11.5% 15.7% 11.0% 3.0% 2.0% Educational Facilities 54.2% -19.8% 5.1% 3.4% 3.0% 2.2% TOTAL ITITUTIOAL 40.2% -18.1% 14.3% 7.5% 5.4% 4.7% TOTAL O-RE BUILDIG 15.0% -14.0% 12.3% 6.4% 5.0% 3.8% Bridges 296.6% -51.7% 0.7% 5.5% 2.7% 2.9% Dams/Canal/arine 317.9% -27.4% 3.0% 3.6% -1.7% 3.8% Water & ewage Treatment 7.8% -24.7% 9.6% 2.4% 1.7% 1.4% Roads 21.7% -1.7% 9.1% 5.8% 4.8% 3.1% Power Infrastructure 107.8% -3.2% 1.2% 5.3% 3.3% 2.1% All Other Civil (Oil & Gas etc.) -74.8% 7.2% 29.4% 28.9% 20.1% 18.9% TOTAL EGIEERIG -27.2% -10.0% 11.4% 12.9% 9.7% 9.2% TOTAL O-REIDETIAL -17.2% -11.4% 11.7% 10.8% 8.3% 7.6% GRAD TOTAL -12.6% -7.9% 8.7% 8.8% 7.1% 6.5% ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 17

18 $ Billions CAD Canada Residential Construction tarts ConstructConnect 55 OB - CAADA FORETRY & LOGGIG 50 $40 $ $20 Forecast $10 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 18

19 $ Billions CAD Canada Hotel/otel Construction tarts ConstructConnect 178 OB - CAADA HOTEL & OTEL 175 $ $ $0.8 Forecast $0.4 $0.0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 19

20 $ Billions CAD Canada Private Offices Construction tarts ConstructConnect OB - CAADA ARCHITECTURAL & EGIEERIG ERVICE 225 $ $ $2 Forecast $1 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 20

21 Canada Employment in Key ub-ectors OB - CAADA COPUTER YTE & DEIG ERVICE OB - CAADA ACCOUTIG & BOOKKEEPIG ERVICE OB - CAADA LEGAL ERVICE Data source: urvey of Employment, Payrolls and Hours (EPH), tatistics Canada (Cansim Table ) / Charts: CanaData ConstructConnect. 21

22 $ Billions CAD Canada hopping/retail Construction tarts ConstructConnect OB - CAADA RETAIL TRADE 2,000 1,900 $2.5 1,800 1,700 $2.0 1,600 1,500 $1.5 $1.0 Forecast $0.5 $0.0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 22

23 Canada Employment in Key ub-ectors OB - CAADA OVER-THE-ITERET HOPPIG OB - CAADA FOOD ERVICE & DRIKIG PLACE 15 1, , Data source: urvey of Employment, Payrolls and Hours (EPH), tatistics Canada (Cansim Table ) / Charts: CanaData ConstructConnect. 23

24 $ Billions CAD Canada Amusement Construction tarts ConstructConnect OB - CAADA OVIE, VIDEO & IC $ $ $2.0 $1.5 $1.0 Forecast $0.5 $0.0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 24

25 $ Billions CAD Canada Warehouse Construction tarts ConstructConnect 200 OB - CAADA TRUCK TRAPORTATIO $ $ Forecast $0.9 $0.6 $0.3 $0.0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 25

26 $ Billions CAD Canada anufacturing Construction tarts ConstructConnect 110 OB - CAADA OTOR VEHICLE AEBLY PLU PART 100 $ $ $3 Forecast $2 $1 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 26

27 Canada Employment in Key ub-ectors OB - CAADA AEROPACE PRODUCT AUFACTURIG OB - CAADA HIP & BOAT BUILDIG Data source: urvey of Employment, Payrolls and Hours (EPH), tatistics Canada (Cansim Table ) / Charts: CanaData ConstructConnect. 27

28 $ Billions CAD Canada Hospital/Clinic Construction tarts ConstructConnect 640 OB - CAADA HOPITAL OB - CAADA COUITY CARE FACILITIE FOR THE ELDERLY $7 $ $5 $4 $3 $2 $1 Forecast $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 28

29 $ Billions CAD Canada Transportation Terminal Construction tarts ConstructConnect OB - CAADA TEPORARY HEALTH ERVICE $ $ $1.2 $0.8 $0.4 Forecast $0.0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 29

30 $ Billions CAD Canada Education Construction tarts ConstructConnect 750 OB - CAADA ELEETARY & ECODARY CHOOL 725 $ $ $4 $2 Forecast $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 30

31 Canada Employment in Key ub-ectors OB - CAADA UIVERITIE OB - CAADA COUITY COLLEGE Data source: urvey of Employment, Payrolls and Hours (EPH), tatistics Canada (Cansim Table ) / Charts: CanaData ConstructConnect. 31

32 $ Billions CAD Canada Water and ewage Construction tarts ConstructConnect $5 $4 $3 $2 Forecast $1 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 32

33 $ Billions CAD Canada Roadwork Construction tarts ConstructConnect $12 $9 $6 Forecast $3 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 33

34 $ Billions CAD Canada Power Infrastructure Construction tarts ConstructConnect 70 OB - CAADA OIL & GA EXTRACTIO 65 $ $12 35 $8 Forecast $4 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 34

35 $ Billions CAD Canada Total Construction tarts ConstructConnect OB - CAADA BUILDIG ATERIAL & UPPLIE DEALER $ $ $90 $60 Forecast $30 $0 Year ource of actuals: ConstructConnect Insight / Forecasts: Oxford Economics and ConstructConnect / Table: CanaData ConstructConnect. 35

36 Price Index (ul 2009 = 100.0) The "Big 5" Commodities - Price Indices: (ince uly 2009 Trough) Lumber Cement teel Copper Gasoline Year and onth Data source (not seasonally adjusted): Bureau of Labor tatistics (PPI eries) / Chart: CanaData ConstructConnect. 36

37 Owners Contemplating Investments ust Weigh ew quare Footage vs Internet and Other Trends The old standby issue: Bricks & mortar retail VERU: Online shopping (videos, music, books, travel agencies) But many more examples now: ingle-family residential (high square footage per unit) treet-corner retail banking branches Hotels/motels University & college campuses edical office buildings Office space Pulp and paper mills ulti-family residential (low square footage per unit) Banking over the Internet (PayPal; etc.) The 'sharing economy' (e.g., Airbnb) Proliferation & convenience of lowercost online courses Health care Google searches / digital transfer of records Working from home / 'hoteling' or sharing of space s and instant messaging / comments on Facebook 37

Metropolitan Gross Domestic Product: Experimental Estimates, 2001 to 2009

Catalogue no. 11-626-X No. 042 ISSN 1927-503X ISBN 978-1-100-25208-7 Economic Insights Metropolitan Gross Domestic Product: Experimental Estimates, 2001 to 2009 by Mark Brown and Luke Rispoli Release date: