Construction and Maintenance Looking Forward Newfoundland and Labrador
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1 015 0 Key Highlights Construction and Maintenance Looking Forward Newfoundland and Labrador The 015 Construction and Maintenance Looking Forward scenario for Newfoundland and Labrador projects a cyclical path for employment, resulting in a moderate decline from 015 to 0. Resource developments and the associated construction boom have dominated the province s economy for 10 years, with peak activity expected in 015. As resource projects are completed between 016 and 018, a large portion of the out-of-province workforce will return home, restoring a more normal level and mix of construction activity. BUILDFORCE S LMI SYSTEM BuildForce Canada uses a scenario-based forecasting system to assess future labour market conditions. This labour market information (LMI) system tracks measures for 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. It was necessary to recast this year s outlook prior to publishing to better reflect the significant changes in current market conditions. The forecast scenario anticipates a second wave of resource investment from 019 to 0 that carries employment back up, but below, the 015 peak. Demographic restrictions will be significant at that time and construction industry recruiters may face the challenge of drawing out-of-province workers back to fill jobs. Sustaining a needed skilled and experienced labour force will be a challenge. The natural population is declining as local deaths exceed births in each year of the forecast scenario and estimated retirements rise. HIGHLIGHTS (015 TO 0) Large mining, electricity generating stations, transmission lines and offshore drilling platform projects drive nonresidential investment to a new peak in 015. Investment declines as projects wind down, but new proposed mining and offshore resource developments generate a second, but smaller, wave of activity later in the scenario period. Following several years of decline, new housing investment is expected to decline again in 015, but then rise marginally over the medium term, with investment remaining below the previous 01 peak level of activity. Total construction employment falls by just over,000 jobs from 015 to 0. Current big resource projects add their last round of hiring in 015. Major projects begin to wind down and other construction markets join the declining trend from 016 to 018.
2 Residential construction started to decline in 01, and new housing employment continues on a downward trend to 0. Almost 6,000 workers are estimated to retire over the scenario period, far in excess of the estimated first-time new entrants 1 to the construction workforce. These market trends impact local and out-of-province workers, as many of Newfoundland and Labrador s skilled labour force work on projects outside of the province. Both interprovincial mobility and international immigration will be key, as the required workforce from 019 to 0 may need to be drawn from outside the local construction market. At various times across the scenario period, Newfoundland and Labrador employers in industrial, commercial and engineering markets may compete with hiring in other regions such as British Columbia, Manitoba and Saskatchewan. NON-RESIDENTIAL CONSTRUCTION Employment in non-residential construction will fall by 1,700 jobs across the scenario period a loss of 11 percent from the 015 peak with significant shifts across the scenario: As known major projects wind down over the medium term, employment declines by almost,500 jobs from the peak in 015 to a trough in 018 a loss of 7 percent. Proposed new resource developments add back almost,000 jobs from 019 to 0. The biggest gains and losses occur in engineering construction work, with the largest fluctuations concentrated in a subset of trades that includes: carpenters heavy-duty equipment mechanics millwrights pipefitters trades helpers and labourers welders RESIDENTIAL CONSTRUCTION Overall, residential employment declines by 00 jobs across the scenario period, but there may be some opportunities for the unemployed to find work in other construction markets. New housing activity is driven by a combination of local demographics and the housing requirements related to proposed new resource development projects over the long term. Local demands drove activity up in the early 000s and resource investments accelerated the growth to 011. New housing had been expanding ahead of household formation and this excess has prompted a down cycle that began in 01 and will reduce employment to 019. By 0, employment in new housing falls by 1,700 jobs from a peak in 01 most of this loss had already happened by 01 and it includes a further decline of more than 00 jobs projected from 015 to 0. A modest housing revival restores some lost jobs late in the scenario period. Renovation and maintenance employment, related to the existing housing stock, remain unchanged over most of the scenario. THE AVAILABLE WORKFORCE From 015 to 0, province-wide demographic trends will limit population growth, as the natural rate of deaths exceeds births by 1,100. This natural decrease is partly offset by the arrival of an estimated 9,500 out-of-province workers, leaving an estimated net decline of,600 in population across the scenario period. International immigration is projected to provide the bulk of the new arrivals, as interprovincial migration balances in-mobility and out-mobility across the period. The total labour force for all industries is estimated to decline by 1,000 workers under the projected changing demographic conditions. Unemployment in most industries is currently at low historical levels and declines further from 015 to 0. Even modest increases in labour requirements will need to be supplied from outside the traditional Newfoundland and Labrador workforce. CHANGES IN CONSTRUCTION LABOUR SUPPLY The BuildForce LMI system tracks supply and accounts for the change in the available labour force, including retirements, new entrants and net in-mobility. Retirements measure permanent losses to the workforce, which are 1 The amount of new entrants is measured by applying the traditional proportion of the provincial workforce aged 0 and younger that enters the construction industry for the first time. The projected estimate across the scenario period assumes that the construction industry is able to recruit this group in competition with other industries. 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. In-mobility refers to the arrival of workers from outside the local construction industry. NEWFOUNDLAND AND LABRADOR CONSTRUCTION AND MAINTENANCE LOOKING FORWARD
3 Figure 1: Annual Estimated Changes in Supply Number of workers,000,000 1,000 0 Forecast -1,000 -,000 Total change in labour force = New entrants + Net in-mobility Retirements -,000 -,000-5, Retirements New entrants Net in-mobility Total change in labour force Source: BuildForce Canada partially offset by the entry of first-time workers aged 0 and younger to the construction labour force. Figure 1 tracks the annual changes in the labour force across the forecast period. Net in-mobility is required to meet overall labour demands, as estimated new entrants may not be sufficient to offset retirements. The ebb and flow of labour requirements across market segments creates a demand for in-mobility in 015 and again from 019 to 0. There are risks of construction workers leaving the province during periods of lower demand, especially in 017. RANKINGS, RISKS AND MOBILITY BuildForce assesses market conditions for trades and occupations in Newfoundland and Labrador using a ranking system that combines measures of the change in employment, unemployment, net in-mobility and adjustments based on industry input. The rankings reflect a combination of residential and non-residential market conditions unique to the province 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 (interprovincial and international) are built into the forecast scenario and included in the ranking assessment (see ranking table on page 5). Ranks are highest in 015 and again between 00 and 0 as proposed new resource developments come on stream. Small annual increases in employment (e.g., less than percent) later in the scenario period are enough to create tight labour markets. Extended periods where markets are ranked as a may mask short-term peak demands for maintenance work and new project start-ups. Ranks signal the potential for mobility: Residential employers may lose qualified workers to commercial and institutional projects depending on the portability of skills, experience and willingness to move across markets. Newfoundland and Labrador employers could lose specialized non-residential trades to other provinces from 016 to 018 and will need to draw them back after 00. Limits to worker availability later in the scenario period are driven by older age profiles and rising retirements for specific trades and occupations, including: construction managers contractors and supervisors residential homebuilders and renovators Recruiting is required by the construction industry from other industries and/or other provinces or countries to meet labour requirements Key Highlights
4 CONCLUSIONS AND IMPLICATIONS The Construction and Maintenance Looking Forward scenario for Newfoundland and Labrador anticipates continuing human resources challenges. Changing employment demands, especially for large resource projects, will require continuing mobility of the workforce across the residential and non-residential sectors and among the provinces. Work opportunities will shift across sectors, creating opportunities for a mobile labour force. Local demographics restrict labour force growth, leaving in-mobility key to recruiting. Retirement demands exceed the capacity of the local workforce, where anticipated first-time new entrants to the labour force are not sufficient to offset replacement demand 5. Tight labour market conditions will constrain recruiting for even modest increases in demand requirements. The Construction and Maintenance Looking Forward national highlights report expands on the range of worker mobility options and industry implications. WHAT S CHANGING IN THE NEWFOUNDLAND AND LABRADOR CONSTRUCTION INDUSTRY? 6 CONSTRUCTION INDUSTRY? 6,000* construction workers are expected to retire over the next 10 years At the same time, the province s labour force declines by -,90 workers as activity decreases, compared to 01, and demographics slow labour force growth. Newfoundland and Labrador will need to attract about,100 new construction workers over the next 10 years. * 6% of the current labour force Source: BuildForce Canada (data as of February 015) 5 Replacement demand refers to the loss of workers due to retirement. 6 The 015 BuildForce LMI system has been enhanced to include measures of office employment in construction that was excluded in earlier labour force measures. New industry totals are consistent with the Labour Force Survey measures for total construction. The infographic presented here refers only to the trades and occupations tracked by BuildForce. NEWFOUNDLAND AND LABRADOR CONSTRUCTION AND MAINTENANCE LOOKING FORWARD
5 MARKET RANKINGS 1 5 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. 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. 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 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. 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. 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. RANKINGS FOR TRADES AND OCCUPATIONS IN NEWFOUNDLAND AND LABRADOR TRADES AND OCCUPATIONS Boilermakers Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Construction millwrights and industrial mechanics Contractors and supervisors Crane operators Drillers and blasters Electrical power line and cable workers Electricians Elevator constructors and mechanics Floor covering installers Gasfitters Glaziers Heavy equipment operators (except crane) continued on next page Key Highlights 5
6 TRADES AND OCCUPATIONS Heavy-duty equipment mechanics Home building and renovation managers* Insulators Ironworkers and structural metal fabricators and fitters Painters and decorators Plasterers, drywall installers and finishers, and lathers Plumbers Refrigeration and air conditioning mechanics Residential and commercial installers and servicers Roofers and shinglers Sheet metal workers Steamfitters, pipefitters and sprinkler system installers Trades helpers and labourers Truck drivers Welders and related machine operators Industrial instrument technicians and mechanics Tilesetters * The NOC classification for Residential home builders and renovators has changed to Home building and renovation managers. Source: BuildForce Canada Timely construction forecast data is available online at Create customized reports on a broad range of selected categories within sector, trade or province covering up to 10 years. For more information, contact: BuildForce Canada Phone: info@buildforce.ca March Funded by the Government of Canada s Sectoral Initiatives Program The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada. NEWFOUNDLAND AND LABRADOR CONSTRUCTION AND MAINTENANCE LOOKING FORWARD
7 For the most detailed and comprehensive construction labour market data in Canada, visit Developed with industry for industry Customizable tables and graphs available for: Data on more than 0 construction trades and occupations by province looking ahead 10 years Macroeconomic and investment data Key economic indicators, construction investment and labour market conditions by province and/or sector Also check out the Construction Map App for major resource construction projects mapped across Canada. Best viewed on tablets (or computers) Key Highlights 7
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