RESIDENTIAL SUMMARY -12,500 (-2.3%) EMPLOYMENT CHANGE

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1 CONSTRUCTION & MAINTENANCE LOOKING FORWARD 2027 RESIDENTIAL SUMMARY Retirements loom large; 122,000 workers expected to retire by 2027 Canada s residential construction workforce must contend with replacing more than 122,000 workers that are expected to retire over the next decade, a loss of 21 percent of the current workforce. Acquiring new workers may become increasingly difficult due to a limited number of youth and increased competition for talent among Canada s industries that face similar age-demographic challenges. Based on historical hiring trends, Canada s residential construction industry is expected to draw an estimated 100,400 first-time new entrants from the local population aged 30 and younger over the next 10 years. Demand for workers is expected to exceed supply. Replenishing a retiring workforce also carries the challenge of skill matching, whereby the skills of retiring workers are not met by new workers entering the workforce. Across the scenario period, hiring requirements are expected to moderate compared to the previous expansionary decade, with 2017 marking the apex for new homebuilding requirements. Slowing population growth and aging demographics are expected to reduce the demand for new housing over the coming decade. Canada s steady residential expansion over the past decade has also increased the housing stock, which over the next decade will contribute to growing demand for renovation and maintenance activity and will help to partly offset decreasing labour requirements in new construction due to the anticipated declines in new housing starts. 10-YEAR RESIDENTIAL CONSTRUCTION WORKFORCE OUTLOOK FOR CANADA 122,100 RETIREMENTS AVERAGE UNEMPLOYMENT 7.3% RATE 100,400 NEW ENTRANTS 6,500 NET MOBILITY -12,500 (-2.3%) EMPLOYMENT CHANGE 2018 HIGHLIGHTS DISTRIBUTION OF CONSTRUCTION EMPLOYMENT IN 2018, CANADA RESIDENTIAL MAINTENANCE RENOVATIONS HIGHLIGHTS NON-RESIDENTIAL NEW HOUSING Human resource management and recruitment must remain the focus as the industry grapples with replacing an estimated 122,000 workers, or 21 percent of the current workforce, expected to retire over the coming decade. Pressures of retiring workers will be felt disproportionately across the provinces, with more severe recruitment challenges concentrated in the Atlantic Provinces where aging demographics limit labour force growth. Based on historical hiring trends, first-time new entrants expected to be drawn into residential construction from the local population aged 30 and younger are estimated at 100,400 over the next 10 years; below expected retirements over the same period. New-housing activity is expected to recede from peak levels with slowing population growth, while a built-up housing stock and improving disposable income generates steady demand for renovation and maintenance work. Nationally, residential employment declines by 12,500 jobs by 2027 a modest 2 percent. Employment growth in renovation and maintenance work partially offsets declines in new housing. Shifting dynamics across residential markets present opportunities for workers to shift focus from new homebuilding to renovation and maintenance projects, where job prospects are more stable. Despite a weaker employment outlook across many provinces, unemployment rates are generally trending lower as workers drawn from the labour force outpace the rate of decline in employment. Thus, declining activity gives a false impression of weaker labour markets, when in fact, markets are expected to be generally balanced across the country. BuildForce s LMI System BuildForce Canada uses a scenario-based forecasting system to assess future construction labour requirements in the heavy industrial, residential, and nonresidential construction markets. This labour market information (LMI) system tracks 34 trades and occupations. To further improve the robustness of the system, BuildForce consults with industry stakeholders, including owners, contractors, and labour groups, to validate the scenario assumptions and construction project lists, and seeks input from government on related analysis. The information is then distilled into labour market condition rankings to help industry employers with the management of their respective human resources.

2 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL CONSTRUCTION OUTLOOK Following a decade of strong growth, Canada s residential construction sector enters a period of more moderate growth, with new-housing employment requirements expected to cycle lower as population growth slows, while renovation and maintenance activity increases and provides steady employment opportunities across the next decade. Although the overall sector labour market is forecast to decrease by 2 percent, industry must grapple with the retirement of an estimated 122,000 workers by 2027, or 21 percent of the current workforce. Human resource management across the country will need to remain focused on attracting, training, and retaining new workers despite slower employment growth in residential construction. Moreover, mentorship and succession planning will prove worthwhile as experienced workers exiting the industry take with them years of accumulated skills. Pressures of retiring workers will be felt disproportionately across the provinces, with more severe recruitment challenges concentrated in the Atlantic Provinces where aging demographics limit labour force growth. Newfoundland and Labrador and New Brunswick, provinces with a negative natural rate of population growth (births less deaths), are challenged with replacing an estimated 30 percent of the residential construction workforce. Provinces with a younger population, such as Manitoba, should expect more manageable retirements over the coming decade. Figure 1 provides a 10-year outlook on the number of retiring workers and the percent of the 2017 labour force this loss represents. Based on historical hiring trends, first-time new entrants expected to be drawn to residential construction from the local population aged 30 and younger are estimated at 100,400 over the next decade. With retirements expected to exceed estimated new entrants, industry will need to increase initiatives to engage underrepresented groups, including Indigenous Canadians, women, immigrants, youth, and workers from other industries. Table 1 provides a summary of the estimated changes in the national residential workforce in 2017and across the full scenario period. Across most provinces, 2017 was an exceptional year for residential construction as indicated by the creation of more than 24,000 jobs compared to the previous year. This rapid increase in residential construction activity outpaced the growth in the local workforce, driving unemployment down by 4,600 workers and drawing in 20,700 workers from outside residential construction (net mobility 1 ) to meet industry needs. As demand softens over the course of the decade, employment in the residential sector is expected to decline by 12,500 jobs. Due to the 122,100 retirements from the industry and only partial replacement by the 100,400 new entrants and 6,500 employees gained through net mobility, however, overall unemployment within the industry is expected to decline by 2,700 workers. While it may Figure 1: cumulative retirements as a percentage of the 2017 residential construction labour force Canada 20.8% (122,100) Newfoundland & Labrador 30.4% (1,700) New Brunswick Nova Scotia 24.2% 29.4% (4,800) (3,500) Quebec Saskatchewan 22.9% 22.8% (20,600) (3,500) Prince Edward Island 21.0% (700) Alberta British Columbia Ontario 20.3% 20.1% (16,900) (23,100) 19.5% (44,400) Manitoba 19.4% (3,000) 0% 5% 10% 15% 20% 25% 30% 35% Source: Statistics Canada, BuildForce Canada 1 Net mobility refers to the entry or exit of workers from outside the local construction industry to meet industry needs. In-mobility is required to meet rising demand, and out-mobility occurs when markets weaken and job prospects diminish. 2 RESIDENTIAL SUMMARY HIGHLIGHTS

3 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 1: Change in residential workforce, Canada RESIDENTIAL WORKFORCE ADJUSTMENT years Retirements -11, ,100 Supply change New entrants 10, ,400 Net mobility 20,700 6,500 Demand change Change in employment 24,300-12,500 Source: BuildForce Canada Change in unemployment -4,600-2,700 seem perplexing that unemployment would decline in a lowerdemand environment, when departures due to retirements are factored into labour force calculations, the overall available pool of labour also declines, meaning the residual construction demand will actually drive the unemployment rate lower. To avoid this risk, industry employers will need to remain actively engaged in worker recruitment and training to avoid the creation of skills gaps and ensure an adequate supply of workers exists to meet industry needs. At the national level, new residential activity is anticipated to recede from an elevated peak in 2017, as population growth is expected to slow, driving household formation 2 and housing starts lower across the period. Fuelled by strong levels of immigration, starts surpassed the previous 2012 peak, with 217,000 units in This high level of activity is anticipated to moderate in most provinces, with starts expected to average 192,000 units nationally across the outlook period. A strong build-up of Canada s housing stock should generate steady demand for renovation and maintenance work in most provinces. Across the scenario period, national residential employment is expected to decline by 12,500 jobs, or a modest 2-percent contraction from 2017 levels. Gains in renovation and maintenance work partially offset declines in new-housing employment: New-housing employment declines by 53,100 jobs or a 21-percent decline. Renovation and maintenance add 40,600 jobs or a 14-percent increase. These diverging dynamics in Canada s residential construction labour markets imply opportunity for workers concentrated in new homebuilding to shift into renovation and maintenance projects, which provide a more stable source of employment growth over the next decade. Renovation and maintenance employment is expected to account for 60 percent of the residential workforce by 2027, compared to 54 percent in A key to workforce planning is identifying the potential for mobility of skilled workers across markets. The annual changes in activity at the national level are not large by historical standards, but differences occur at the provincial level, where investment and regional employment demands move in different orders of magnitude and directions. Table 2 shows the anticipated changes in residential employment by province for two periods: 2018 to 2022 and 2023 to Despite a weaker employment outlook across many provinces, unemployment rates are generally trending lower as workers drawn from the labour force outpace the rate of decline in employment. Thus, declining activity gives a false impression of weaker labour markets, when in fact, markets are expected to be generally balanced across the country. In some markets across Canada, there may be some difficulty finding experienced workers to build and renovate homes. Table 2: Change in residential employment, by province REGION Total employment Canada -3% 1% Newfoundland and Labrador -13% 10% Nova Scotia -6% -4% New Brunswick -3% -1% Prince Edward Island -8% 7% Quebec -6% -2% Ontario 1% -1% Manitoba -5% 0% Saskatchewan 1% 24% Alberta 5% 1% British Columbia -13% 3% Source: Statistics Canada, BuildForce Canada % CHANGE % CHANGE 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 how population growth is transformed into demand for new housing. RESIDENTIAL SUMMARY HIGHLIGHTS

4 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD PROVINCIAL INSIGHTS Across Canada, retirements dominate hiring requirements over the next decade as aging demographics take hold. Replenishing a retiring workforce will require industry to ramp up initiatives related to training, mentorship, and retention of new workers. Industry may need to improve on initiatives to attract underrepresented groups such as women, the Indigenous population, and immigrants to sustain a long-term skilled workforce. This section describes the investment cycles in new housing and renovations, and the related employment trends and replacement demands driven by expected retirements for each province. Shifts in construction activity are expected across most provinces as population growth slows and the demand for new housing declines from recent peak levels compared to more moderate growth in renovation and maintenance work, which will partly offset anticipated declines in new construction. A summary of labour market conditions is reported for each province. 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 3, and adjustments based on industry input. The rankings reflect residential labour market conditions unique to each 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. The number of trades reported in each province varies, as 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 conditions at the sector level. MARKET RANKINGS 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. 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. 4 RESIDENTIAL SUMMARY HIGHLIGHTS

5 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY NEWFOUNDLAND AND LABRADOR Industry must contend with an aging workforce and replacing an estimated 1,700 workers, or more than 30 percent of the current residential workforce across the outlook period. The worst may be passsed for Newfoundland and Labrador s residential construction sector following several years of declines in construction activity and employment since the 2012 peak. While weaker housing demand should prevail over the near term, employment declines are expected to be more modest and partly offset by moderate growth in renovation and maintenance work. Age-related attrition presents a significant loss to the province s residential workforce. Across the scenario period, the estimated number of retirements outpaces the number of first-time new entrants expected to be drawn from the local population aged 30 and younger required to sustain balanced labour markets. Newfoundland and Labrador s residential construction labour markets continued to adjust to lower demand in 2017, with overall employment declining by an estimated 300 jobs. The exit of workers from the local workforce and retirements, however, caused the labour force to decline at a faster pace than employment, leading to lower unemployment. Over the next decade, a marginal decline in employment is expected, but industry is tasked with replacing 1,700 residential construction workers estimated to retire, which is partly offset by 800 new entrants expected to be drawn from the local population. To meet demand requirements, industry will need to bring in 500 workers from outside the industry through net in-mobility. Slower economic growth and population trends are expected to limit the demand for new housing over the next decade, as out-migration and negative natural population growth (births less deaths) translate into population declines for most of the next 10 years. Housing starts should continue to recede from the 2012 peak, with the bottom of near 800 units expected by 2021 before a modest recovery later in the outlook period. The weaker demand for new housing has driven home prices lower, pushing some homeowners toward renovating their current homes instead of upgrading to new homes. The outlook remains positive, however, for the building of smaller singles and duplexes as more affordable housing options. Across the scenario period, overall residential employment is expected to decline a moderate 4 percent. Figure 2 (page 6) shows Newfoundland and Labrador s residential construction employment growth by sector. Table 3 (page 6) shows weak labour market conditions in 2017, as activity declined for both new housing and renovation work. Market conditions for trades more concentrated in new construction remain weak in 2018 followed by mostly balanced markets, as older age demographics and the expected retirements contribute to lower rates of unemployment and balanced market conditions, but at lower levels of employment. For Newfoundland and Labrador, residential rankings are reported for 10 of the 34 covered trades and occupations. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR NEWFOUNDLAND AND LABRADOR 1, RETIREMENTS NEW ENTRANTS NET MOBILITY -200 EMPLOYMENT CHANGE RESIDENTIAL SUMMARY HIGHLIGHTS

6 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 2: Residential construction employment growth outlook, Newfoundland and Labrador 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada Table 3: Residential market rankings, Newfoundland and Labrador TRADES AND OCCUPATIONS RESIDENTIAL Carpenters Contractors and supervisors Electricians Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Plumbers Residential and commercial installers and servicers Roofers and shinglers Trades helpers and labourers Source: BuildForce Canada 6 RESIDENTIAL SUMMARY HIGHLIGHTS

7 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY NOVA SCOTIA Nova Scotia s recent residential construction growth peaks in 2018, with employment requirements estimated at 17,000 jobs. Aging demographics and weaker population growth are expected to slow demand across the scenario period, but industry will need to address an aging workforce and the replacement of retiring workers. Across the scenario period, retirements are estimated at 4,800 workers, or 24 percent of the province s 2017 residential workforce. Adding to industry challenges, the number of retirements is expected to outpace estimated first-time new entrants drawn from the local population aged 30 and younger, so that even under slower growth, normal unemployment rates are driven lower over the long term. The importance of recruiting, training, and retaining qualified workers is paramount, as attracting new workers may become more challenging as construction competes with other industries for a smaller pool of youth. Like many provinces, Nova Scotia saw a boost in residential construction demand in 2017, driven partially by stronger levels of immigration. The gain of 500 new residential construction jobs combined with a shrinking labour force led to declines in unemployment of 600 workers. While employment is expected to contact by 1,600 jobs, industry is tasked with replacing 4,800 residential construction workers expected to retire over the coming decade, which is partly offset by 3,300 new entrants expected to be drawn from the local population. As overall activity slows across the scenario period, an additional 1,100 workers are expected to leave the industry through out-mobility. Across the scenario period, population growth is expected to weaken in Nova Scotia and limit the demand for new housing over the decade. Natural population growth (births less deaths) is anticipated to decline further across the scenario period as the gap between deaths and births widens. International migration and improved retention of the local population is anticipated to offset declines in natural population growth for most of the scenario period. International migration has positively impacted Nova Scotia s residential construction market, with housing starts increasing marginally in Over the next decade, weaker population trends are anticipated to lead to steady declines in housing starts and new-housing activity. Nonetheless, growth prospects remain positive in metropolitan areas such as Halifax due to continuing urbanization of the province s population. Total residential employment is expected to decline by 1,600 jobs, or a 9-percent decline from 2017 levels, with declines concentrated in the new-housing sector. Employment gains in renovation and maintenance work partially offset significant declines in new housing: New-housing employment is expected to decline by 2,500 jobs or a 44-percent decline from 2017 levels. Employment in renovations is expected to increase by 700 jobs or an 8-percent increase from 2017 levels. Residential maintenance employment is expected to increase by 200 jobs or an 8-percent increase from 2017 levels. Renovations are expected to become a key driver of employment in Nova Scotia s residential labour market. Renovations and maintenance, which accounted for 66 percent of employment requirements in 2017, should account for nearly 80 percent of residential employment by Figure 3 (page 8) shows Nova Scotia s residential construction employment growth by sector. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR NOVA SCOTIA 4,800 3,300 RETIREMENTS NEW ENTRANTS -1,600-1,100 EMPLOYMENT CHANGE NET MOBILITY RESIDENTIAL SUMMARY HIGHLIGHTS

8 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 3: Residential construction employment growth outlook, Nova Scotia 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada Table 4 shows that residential labour markets were mostly balanced across the outlook period. Weaker labour market conditions are anticipated to emerge for trades and occupations concentrated in new housing construction, while moderate growth in renovation and maintenance helps offset job losses. Expected retirements will contribute to lower rates of unemployment and contribute to balanced labour market conditions, but at lower levels of overall total employment. For Nova Scotia, residential rankings are reported for 17 of the 34 covered trades and occupations. Table 4: Residential market rankings, Nova Scotia TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Construction estimators Construction managers Contractors and supervisors Electricians Floor covering installers Heavy equipment operators (except crane) Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Plumbers Residential and commercial installers and servicers Continued on next page 8 RESIDENTIAL SUMMARY HIGHLIGHTS

9 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 4: Residential market rankings, Nova Scotia (continued) TRADES AND OCCUPATIONS RESIDENTIAL Roofers and shinglers Sheet metal workers Trades helpers and labourers Truck drivers Source: BuildForce Canada NEW BRUNSWICK New Brunswick s residential construction sector is faced with the challenge of replacing an estimated 3,500 workers, or nearly 30 percent of the current workforce, who are expected to retire over the coming decade. While total employment requirements are expected to remain mostly unchanged across the period, sustaining the current workforce requires industry to remain focused on recruiting, training, and retaining workers to offset those expected to retire. Over the next decade, employment declines marginally by 400 jobs, but industry must address an aging workforce and the replacement of an estimated 3,500 residential construction workers expected to retire, which is partly offset by 2,100 new entrants estimated to be drawn from the local population. To meet overall demand requirements, industry will need to bring in an additional 400 workers from outside the industry through net in-mobility. Aging demographics are expected to limit demand for new housing in the province over the next decade, as negative natural population growth (births less deaths) is only partly offset by migration. Population growth in New Brunswick is anticipated to weaken compared to the past decade and is contingent on the province s ability to attract migrants. Housing starts increased marginally in 2017, but are anticipated to remain on a downward trajectory over the coming decade in line with declining population trends. New-housing investment follows the trend in housing starts, although growth in duplexes and high-end singles is anticipated. Moreover, new homebuilding is concentrated in metropolitan areas such as Fredericton, Moncton, and Saint John, as the population continues to move from rural to urban centres. Diverging market conditions present opportunities for workers to move from new housing to renovation and maintenance work. Over the next decade, investment in renovation and maintenance work is expected to rise steadily and dominate hiring requirements, employing 80 percent of all residential workers. By 2027, this share is estimated to increase to 90 percent. Across the scenario period, overall residential employment is expected to remain near current levels, with employment declines in new housing mostly offset by growth in renovation and maintenance. New-housing employment is expected to decline by 800 jobs or a 44-percent decline from 2017 levels. Employment in renovation and maintenance is expected to increase by 500 jobs or a 6-percent increase from 2017 levels. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR NEW BRUNSWICK 3,500 2, RETIREMENTS NEW ENTRANTS NET MOBILITY -400 EMPLOYMENT CHANGE RESIDENTIAL SUMMARY HIGHLIGHTS

10 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 4 shows the employment trends by sector in New Brunswick s residential construction industry. Table 5 suggests that residential labour markets have strengthened somewhat from a year ago with mostly balanced markets, but weaker conditions persisted for several trades and occupations in Demand for trades more concentrated in new construction are expected to weaken in 2018 and 2019 with anticipated declines in population growth and housing starts, but moderate growth in renovation work should maintain balanced market conditions. Age demographics and expected retirements contribute to lower rates of unemployment, which contribute to maintaining balanced labour market conditions at lower levels of employment over the scenario period. For New Brunswick, residential rankings are reported for 16 of the 34 covered trades and occupations. Figure 4: Residential construction employment growth outlook, New Brunswick 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada Table 5: Residential market rankings, New Brunswick TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Construction estimators Construction managers Contractors and supervisors Electricians Floor covering installers Heavy equipment operators (except crane) Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Continued on next page 10 RESIDENTIAL SUMMARY HIGHLIGHTS

11 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 5: Residential market rankings, New Brunswick (continued) TRADES AND OCCUPATIONS RESIDENTIAL Plumbers Residential and commercial installers and servicers Roofers and shinglers Trades helpers and labourers Truck drivers Source: BuildForce Canada PRINCE EDWARD ISLAND Prince Edward Island s residential hiring requirements exceeded available workers in 2017 as immigration-driven residential building activity soared. Accelerated levels of migration induced housing starts to spike in 2017, exceeding 1,000 units and nearly doubling in a single year. Residential projects and tight labour markets are likely to carry over into 2018 before pressure eases. Over the next decade, residential employment requirements are anticipated to slow from the 2017 peak, but remain well above historical levels of activity. Sustaining a skilled workforce will be challenged by retirements across the scenario period, as an estimated 700 workers, or 21 percent of the current workforce, are expected to retire over the coming decade. Adding to market challenges, the estimated number of retirements outpaces the number of first-time new entrants expected to be drawn from the local population aged 30 and younger needed to sustain balanced labour markets. Attracting workers into the industry may become increasingly difficult as construction competes with other industries for a relatively smaller pool of youth. Prince Edward Island s residential construction labour markets were likely under pressure in 2017, as an estimated 600 new jobs were created. Relatively strong population growth in the province induced labour force growth, although not sufficient to meet rising employment requirements, and thus, unemployment was driven lower. Looking forward, industry is tasked with replacing 700 residential construction workers expected to retire over the coming decade, which is mostly offset by 600 new entrants expected to be drawn from the local population. As overall activity slows over the long term, an estimated 100 workers are expected to exit the industry through out-mobility. Across the scenario period, overall residential employment cycles down over the near term and then back up, leaving employment 7 percent lower than the 2017 peak by the end of the scenario period, but 21 percent higher than 2016 levels. Over the next decade: New-housing employment recedes by 380 jobs from the 2017 peak or a 28-percent decline. Renovation and maintenance adds 180 new jobs or a 13-percent increase from 2017 levels. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR PRINCE EDWARD ISLAND RETIREMENTS NEW ENTRANTS EMPLOYMENT CHANGE NET MOBILITY RESIDENTIAL SUMMARY HIGHLIGHTS

12 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 5 shows the employment trends by sector in Prince Edward Island s residential construction industry. Table 6 shows residential labour market rankings across the scenario period. Market conditions tightened significantly in 2017 due to the rapid rise in new housing construction. Conditions may remain tight for some trades, as some activity from 2017 is expected to carry over into The remainder of the scenario period, from 2019 to 2027, will see mostly balanced labour markets. For Prince Edward Island, residential rankings are reported for seven of the 34 covered trades and occupations. Figure 5: Residential construction employment growth outlook, Prince Edward Island 3,000 2,500 2,000 1,500 1, Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada Table 6: Residential market rankings, Prince Edward Island TRADES AND OCCUPATIONS RESIDENTIAL Carpenters Contractors and supervisors Electricians Home building and renovation managers Painters and decorators (except interior decorators) Residential and commercial installers and servicers Trades helpers and labourers Source: BuildForce Canada 12 RESIDENTIAL SUMMARY HIGHLIGHTS

13 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY QUEBEC Housing starts, which had been following a mostly downward trend since the mid 2000s, gained momentum in 2016 and 2017 driven by rising immigration that boosted hiring requirements. This trend is expected to continue into 2018 before anticipated slower population growth lowers the demand for new residential construction. Receding employment requirements, however, may not necessarily translate into weaker market conditions, as industry is faced with replacing an estimated 20,600 workers, or 23 percent of the current workforce, anticipated to retire over the coming decade. Across the scenario period, the estimated number of retirements outpaces the number of first-time new entrants expected to be drawn from the local population aged 30 and younger needed to sustain long-term industry needs. Attracting workers into the industry may become increasingly difficult as construction competes with other industries facing similar age-demographic challenges and less youth available to enter the workforce. Quebec s natural population growth (births less deaths) remains positive across the scenario period, but declines steadily, approaching negative by Like many provinces, 2017 was an exceptional year for residential construction in Quebec, as indicated by employment growth of 5,000 jobs compared to the previous year. This rapid increase in residential construction activity outpaced the growth in the local workforce, driving unemployment down by 1,600 workers. Looking forward, employment is expected to contact by 7,100 jobs as activity slows over the long term. Notwithstanding this expected decline in demand, industry must remain focused on recruitment to ensure it replaces those workers expected to leave the industry over the next decade due to retirement. Over the next decade, an estimated 20,600 residential construction workers are expected to retire, which are only partly offset by 15,100 new entrants expected to be drawn from the local population. Under lower levels of activity later in the scenario period, an estimated 2,800 workers are expected to leave the industry through out-mobility. Over the coming decade, housing starts are expected to slow, and related employment declines. Divergence in residential markets, with growth in renovations and maintenance, helps to absorb some of the new-housing employment declines over the next decade. Overall residential employment requirements decline by 7,100 jobs, or 9 percent from 2017 levels, with declines concentrated in new housing over the first half of the scenario period. Across the scenario period: New-housing employment is expected to decline by 11,900 jobs or a 39-percent decline from 2017 levels. Renovations and maintenance add an estimated 4,800 jobs or a 10-percent increase from 2017 levels. Figure 6 (page 14) summarizes the change in residential employment by sector in Quebec. Table 7 (page 14) 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 offset by rising retirements. It is assumed that industry manages demand requirements and workforce availability through established promotion and training programs. For Quebec, residential rankings are reported for 29 of the 34 covered trades and occupations. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR QUEBEC 20,600 15, 100 RETIREMENTS NEW ENTRANTS -7,100-2,800 EMPLOYMENT CHANGE NET MOBILITY RESIDENTIAL SUMMARY HIGHLIGHTS

14 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 6: Residential construction employment growth outlook, Quebec 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada Table 7: Residential market rankings, Quebec TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Crane operators Electricians Elevator constructors and mechanics Floor covering installers Gasfitters Glaziers Heavy equipment operators (except crane) Heavy-duty equipment mechanics Home building and renovation managers Insulators Continued on next page 14 RESIDENTIAL SUMMARY HIGHLIGHTS

15 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 7: Residential market rankings, Quebec (continued) TRADES AND OCCUPATIONS RESIDENTIAL Ironworkers and structural metal fabricators Painters and decorators (except interior 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 Tilesetters Trades helpers and labourers Truck drivers Welders and related machine operators Source: BuildForce Canada ONTARIO Unprecedented growth in Ontario s residential construction sector pushed employment to record levels in most regions as industry struggled to keep pace with housing demands. Strong levels of activity in 2017 strained against the availability of qualified workers leading to project delays, with many pre-sold units unable to be completed by their projected deadline. As labour markets continue to adjust and builders aim to fulfill work orders, tightness is likely to carry over into Moreover, labour market tightness in the Greater Toronto Area (GTA) may continue well into the next four years as housing demand persists. Slowing population growth is anticipated to dampen the demand for new homebuilding in Ontario, with regional exceptions. As in other provinces, Ontario s expansive housing stock will generate steady demand for renovation and maintenance work and should offset the anticipated declines in new housing. Across the scenario period: New-housing employment requirements are expected to decline by 16,900 jobs or an 18-percent decline when compared to 2017 peak levels of activity and employment. Renovations and maintenance add 17,100 new jobs a 14-percent increase from Expected declines in new homebuilding are offset by steady employment growth in renovation and maintenance across the outlook period. Figure 7 (page 16) summarizes the change in residential employment by sector in Ontario. Adding to market challenges is an aging workforce and the expected retirement of 44,400 residential workers, or 20 percent of the 2017 workforce over the next decade. Based on historical hiring trends, Ontario s residential construction sector is expected to draw an estimated 40,000 first-time new entrants from the local population aged 30 and younger over the next 10 years, which is outpaced by the number of expected retirements. Ontario will likely need to bring in workers from outside the local residential workforce to meet current and future demands as the province contends with an aging workforce. Sustaining the province s residential workforce requires industry to remain focused on active recruiting, training, and retaining new entrants. Ontario s residential activity grew at an exceptional pace in 2017, as indicated by employment growth of more than 10,000 jobs compared to the previous year. This rapid increase in residential construction activity outpaced growth in the local workforce, driving unemployment down by 1,800 workers and bringing unemployment rates well below historical averages. Looking forward, industry is tasked with replacing more than 44,000 residential construction workers expected to retire over the coming decade. New entrants expected to be drawn from the local population estimated at 39,900 only partly offset expected retirements. To meet industry demand requirements, an estimated 7,900 additional workers are needed from outside the industry through in-mobility. RESIDENTIAL SUMMARY HIGHLIGHTS

16 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 7: Residential construction employment growth outlook, Ontario 250, , , ,000 50,000 Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR ONTARIO 44,400 39,900 7, RETIREMENTS NEW ENTRANTS NET MOBILITY EMPLOYMENT CHANGE 16 RESIDENTIAL SUMMARY HIGHLIGHTS

17 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Across Ontario, the Greater Toronto Area and Central region account for more than three quarters of Ontario s residential construction labour market. Dynamics in these regions shape the overall provincial trends. New-housing activity in Central Ontario cycles up over the medium term, but slows over the latter half of the scenario period as population growth weakens. Renovation and maintenance employment requirements provide a more stable source of residential job opportunities. Population growth is expected to decline steadily in Eastern Ontario, driving down the demand for new housing. Growing demand for renovation and maintenance work is not sufficient to fully absorb employment declines in new housing, leading overall residential employment to return to 2016 levels. The Greater Toronto Area continues to be a key destination for international, interprovincial, and interregional migration. Across the scenario period, population growth is expected to exceed 1 percent per year and contribute to steady demand for housing. Land availability challenges are also expected to limit the growth of new housing in the region; however, renovation investment should grow steadily throughout the decade offsetting the anticipated modest declines in new-housing employment. Overall residential employment is expected to grow by 8,800 jobs, or 8 percent over the coming decade, with gains concentrated in renovation and maintenance work. Following a decade of population contraction, Northern Ontario saw population growth turn positive in A near-term expansion in residential construction is expected over the next three years, as migration adds to the region s population and increases housing demand. An estimated 700 new residential jobs are expected to be created between 2018 and the peak in Southwestern Ontario s residential construction activity peaked in 2017 and is anticipated to recede with slowing population growth. Modest growth in renovation employment requirements are not sufficient to offset softening demand for new housing. Table 8: Changes in residential employment, by region, Ontario REGION Total residential employment Ontario 1% -1% Central Ontario 0% -5% Eastern Ontario -5% -5% Greater Toronto Area 4% 4% Northern Ontario 6% -1% Southwestern Ontario -7% -10% Source: Statistics Canada, BuildForce Canada % CHANGE % CHANGE Table 8 summarizes Ontario s residential employment by region. Tables 9 through 13 show residential rankings for Ontario s five regions: Central, Eastern, Greater Toronto Area, Northern, and Southwestern. Market rankings are unavailable at the provincial level. Central Ontario: Table 9 shows tight residential labour market rankings for most trades in 2017, reflecting consecutive years of rising labour demands related to new housing construction. Momentum is expected to carry over into 2018, but labour markets should return to balance as the pace of new housing slows marginally. As new housing continues to slow in 2019, market conditions weaken for trades more concentrated in new residential construction. Across the remainder of the scenario period, steady levels of renovation activity contribute to maintaining generally balanced labour markets, signalled by a rank of 3, until slower population growth weakens housing demands toward the end of the decade. For Central Ontario, residential rankings are reported for 25 of the 34 covered trades and occupations. Table 9: Residential market rankings, Central Ontario TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Electricians Elevator constructors and mechanics Floor covering installers Floor covering installers Continued on next page RESIDENTIAL SUMMARY HIGHLIGHTS

18 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Table 9: Residential market rankings, Central Ontario (continued) TRADES AND OCCUPATIONS RESIDENTIAL Glaziers Heavy equipment operators (except crane) Home building and renovation managers Insulators Ironworkers and structural metal fabricators Painters and decorators (except interior 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 Tilesetters Trades helpers and labourers Truck drivers Source: BuildForce Canada Eastern Ontario: Table 10 shows tighter residential labour markets in 2017 and 2018, signalling recruitment challenges for many trades working in the residential sector. These conditions reflect the recent rapid increase in new housing construction. Labour market conditions for trades involved heavily in new construction are expected to return to balance by 2019 as the pace of new housing recedes. Across the scenario period, older age demographics and expected retirements should contribute to lower levels of unemployment with generally balanced labour market conditions, even during periods of moderate employment declines. For Eastern Ontario, residential rankings are reported for 20 of the 34 covered trades and occupations. Greater Toronto Area: The rise in both renovation and new housing activity tightened labour market conditions for most residential trades and occupations in 2017, as reflected in Table 11. Recruiting challenges translated into some project delays, which carry work into 2018 and sustain strong employment demands even as overall housing starts recede from the peak. Housing starts, however, remain above historical levels of activity and employment. Tighter market conditions for trades and occupations with older age profiles, including bricklayers and construction managers, may persist across the scenario period. Markets for trades that traditionally rely on mobility between the residential and non-residential sectors, such as carpenters, face added recruiting challenges due to competing demands across both market segments. Even with moderate rates of growth, it will remain a challenge for industry to keep pace with the recruiting and training requirements for new workers. For the Greater Toronto Area, residential rankings are reported for 27 of the 34 covered trades and occupations. 18 RESIDENTIAL SUMMARY HIGHLIGHTS

19 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 10: Residential market rankings, Eastern Ontario TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Electricians Floor covering installers Heavy equipment operators (except crane) Home building and renovation managers Insulators Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Plumbers Residential and commercial installers and servicers Roofers and shinglers Sheet metal workers Tilesetters Trades helpers and labourers Truck drivers Source: BuildForce Canada Table 11: Residential market rankings, Greater Toronto Area TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Crane operators Electricians Continued on next page RESIDENTIAL SUMMARY HIGHLIGHTS

20 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Table 11: Residential market rankings, Greater Toronto Area (continued) TRADES AND OCCUPATIONS RESIDENTIAL Elevator constructors and mechanics Floor covering installers Gasfitters Glaziers Heavy equipment operators (except crane) Home building and renovation managers Insulators Ironworkers and structural metal fabricators Painters and decorators (except interior 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 Tilesetters Trades helpers and labourers Truck drivers Welders and related machine operators Source: BuildForce Canada Northern Ontario: Table 12 shows that over the near term, residential labour market conditions for Northern Ontario are generally balanced, signalled by a rank of 3. An anticipated rise in new- housing construction is expected between 2018 and 2020, with recruiting challenges for some trades and occupations concentrated in new construction. Given the small size of the regional workforce, moderate increases can quickly translate into market pressures. Older age demographics in the North, coupled with expected retirements, contribute to lower rates of unemployment, maintaining balanced market conditions at lower levels of employment over the latter half of the scenario period as new-housing activity slows. For Northern Ontario, residential rankings are reported for 11 of the 34 covered trades and occupations. Southwestern Ontario: Table 13 shows that new housing construction demands raised recruitment requirements above the available regional workforce in Labour market conditions for trades and occupations involved in new construction are expected to return to balance in 2018 as housing starts recede. An aging workforce and estimated retirements combined with rising renovation demands will contribute to maintaining balanced labour market conditions across the scenario period, even at lower levels of total residential employment. For Southwestern Ontario, residential rankings are reported for 18 of the 34 covered trades and occupations. 20 RESIDENTIAL SUMMARY HIGHLIGHTS

21 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 12: Residential market rankings, Northern Ontario TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Construction managers Contractors and supervisors Floor covering installers Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Residential and commercial installers and servicers Roofers and shinglers Trades helpers and labourers Source: BuildForce Canada Table 13: Residential market rankings, Southwestern Ontario TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Electricians Floor covering installers Heavy equipment operators (except crane) Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Plumbers Residential and commercial installers and servicers Roofers and shinglers Tilesetters Trades helpers and labourers Truck drivers Source: BuildForce Canada RESIDENTIAL SUMMARY HIGHLIGHTS

22 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD MANITOBA The introduction of Winnipeg s impact of growth fee on new homes, combined with another year of record levels of immigration, drove new residential activity to new highs in Housing starts surpassed 7,000 units a rise of 43 percent compared to the previous year. Expected slower population growth, however, is expected to cool off residential construction in Manitoba over the next decade. Although Manitoba has built up a young population, as signalled by one of the highest rates of natural population growth (births less deaths), migration into the province is expected to wind down. While international migration remains fairly strong, interprovincial out-migration is anticipated to accelerate over the scenario period, as the winding down of major heavy-industrial projects slows economic growth and overall unemployment rates rise. Housing starts and new-housing employment requirements are expected to follow a downward trend, as population growth slows from 2019 to 2024 before stabilizing over the long term. Moderate growth in renovation and maintenance work partly absorbs employment declines in new housing. Across the scenario period, new-housing-related employment declines by 1,900 jobs, or 31 percent from 2017 levels, with nearly half of the decline concentrated in Rising demand for renovation and maintenance work adds 1,200 new jobs, or a 15-percent increase, partially offsetting declines in new housing. Overall residential employment declines by a modest 700 jobs, or 5 percent from current levels. Figure 8 summarizes Manitoba s residential employment change by sector. Manitoba has managed to attract a young population and, thus, faces a relatively smoother transition from retiring workers. Industry, however, must remain focused on attracting, training, and retaining new workers as the province grapples with replacing an estimated 3,000 residential workers over the coming decade, or nearly 20 percent of the current workforce. Due to Manitoba s younger population profile, there should be an adequate number of new entrants aged 30 and younger available locally to replace retiring workers. Following two consecutive years of employment declines, Manitoba s residential construction industry posted employment growth of 1,200 jobs in Labour force growth of 700 workers was not sufficient to meet rising demands and drew unemployment lower by 500 workers. Over the next decade, employment declines marginally by 700 jobs, but industry must contend with an aging workforce and the replacement of an estimated 3,000 residential construction workers expected to retire. Given Manitoba s younger population, expected retirements are mostly offset by 2,900 new entrants estimated to be drawn from the local population. As activity slows across the scenario period, an estimated 500 workers are expected to exit the industry through out-mobility. Table 14 shows residential labour market conditions for Manitoba across the scenario period. The higher rankings for several trades in 2017 reflect the high level of new housing construction. Although activity is expected to carry over into 2018, market conditions should return to balance for most trades and occupations, followed by a weakening of demand in 2021 and 2022 with the anticipated start of a moderate new-housing down-cycle. Renovation activity, however, is expected to add to workforce demands and sustain related employment for some trades and occupations across the scenario period. For Manitoba, residential rankings are reported for 17 of the 34 covered trades and occupations. Figure 8: Residential construction employment growth outlook, Manitoba Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada 22 RESIDENTIAL SUMMARY HIGHLIGHTS

23 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR MANITOBA 3,000 2,900 RETIREMENTS NEW ENTRANTS EMPLOYMENT CHANGE NET MOBILITY Table 14: Residential market rankings, Manitoba TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Electricians Floor covering installers Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Plumbers Residential and commercial installers and servicers Roofers and shinglers Sheet metal workers Trades helpers and labourers Truck drivers Source: BuildForce Canada RESIDENTIAL SUMMARY HIGHLIGHTS

24 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD SASKATCHEWAN Modest declines in Saskatchewan s residential construction activity is expected over the next few years before a steady, but moderate recovery gets underway. Active recruiting, even under a period of slower growth over the near term, will be essential to meet future demands. Uncertainty surrounding global demands and commodity prices has delayed final investment decisions for some major resource projects, which has translated into potential slower economic growth and rising unemployment rates in the province compared to the last decade. As a result, interprovincial out-migration is expected to accelerate over the next few years as workers seek employment opportunities in other provinces. Population growth slows over the next five years, driven by accelerated out-provincial migration: Saskatchewan s relatively young population leads to positive and steady growth in the natural rate of population (births less deaths) across the full scenario period. International migration recedes from peak levels in 2017, but remains stable, averaging 12,700 people per year. Interprovincial migration returned to negative in 2014, following a seven-year run of recruiting people from outside of the province. Over the next decade, interprovincial out-migration is expected to accelerate to 2020 before improved economic growth is expected to lead to better retention of the local population. Population dynamics dictate weaker new-housing activity over the next two years before a steady recovery commences. Following sharp declines since the peak in 2012, housing starts rose marginally in 2017 and are expected to remain stagnant over the next two years marks the turning point for Saskatchewan s new homebuilding, as starts are expected to rise steadily, increasing 67 percent by 2027 and lifting new-housing investment and related employment. The recent build-up of Saskatchewan s housing stock creates a steady, but moderate demand for renovation and maintenance work across the scenario period. Across the scenario period, Saskatchewan s employment requirements rise in all segments of residential construction, increasing overall by 3,600 new jobs, or a 26-percent increase from current levels. New housing adds 2,300 new jobs across the scenario period or a 42-percent increase from 2017 levels. Employment gains are concentrated after Renovation and maintenance employment grows by 1,200 jobs or a 15-percent increase from 2017 levels. Employment growth in renovations and maintenance tends to be steadier and moderate, compared to more cyclical and irregular growth in new housing. Figure 9 shows the residential employment change by sector in Saskatchewan. Adding to hiring requirements is the expected exit of an estimated 3,500 workers, or 23 percent of the current workforce, anticipated to retire over the coming decade. Although Saskatchewan enjoys a relatively younger population, aging demographics indicate that industry will need to remain focused on attracting, training, and retaining new workers. Figure 9: Residential construction employment growth outlook, Saskatchewan Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada 24 RESIDENTIAL SUMMARY HIGHLIGHTS

25 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY In response to lower demand, Saskatchewan residential construction workers continued to exit the workforce to other provinces or other industries in 2017, contributing to a labour force decline of 300 workers. Employment only receded modestly, however, leading to a decline in unemployment. Having cycled down for several years with employment losses, residential activity rises across the scenario period, adding 3,600 jobs by In addition to increased employment, industry must address an aging workforce and an estimated 3,500 workers expected to retire over the next decade. These increased requirements are partly offset by an estimated 3,100 new entrants expected to be drawn from the local population. To meet long-term industry needs, an additional 4,000 workers from outside the local residential construction industry are needed through in-mobility. Table 15 reflects weak labour market conditions for most trades and occupations in 2017 following consecutive years of declines in new housing. Market conditions should return to balance in 2018, but tighten between 2023 and 2025 for most trades and occupations as new housing increases. For Saskatchewan, residential rankings are reported for 16 of the 34 covered trades and occupations. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR SASKATCHEWAN 3,500 3,100 4,000 3,600 RETIREMENTS NEW ENTRANTS NET MOBILITY EMPLOYMENT CHANGE Table 15: Residential market rankings, Saskatchewan TRADES AND OCCUPATIONS - RESIDENTIAL Bricklayers Carpenters Construction managers Contractors and supervisors Electricians Floor covering installers Heavy equipment operators (except crane) Home building and renovation managers Painters and decorators (except interior decorators) Plasterers, drywall installers and finishers, and lathers Plumbers Continued on next page RESIDENTIAL SUMMARY HIGHLIGHTS

26 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Table 15: Residential market rankings, Saskatchewan (continued) TRADES AND OCCUPATIONS - RESIDENTIAL Residential and commercial installers and servicers Roofers and shinglers Sheet metal workers Trades helpers and labourers Truck drivers Source: BuildForce Canada ALBERTA Following several years of decline, Alberta s residential construction sector was up in Housing starts increased by 4,900 units by year s end, driven by rising immigration, a younger age demographic, and the continued rebuilding in Fort McMurray. Starts are expected to recover to 33,300 units by 2021 and approach 37,000 units by 2027, but do not surpass the 40,600-unit peak reported in Renovation and maintenance work is expected to rise at a steady, but moderate rate across the scenario period, adding to employment opportunities. Across the scenario period, overall residential employment requirements are expected to increase by 4,500 jobs, or a 6-percent increase from 2017 levels. Gains are expected across all segments of residential construction, with stronger gains concentrated in new homebuilding. New-housing employment requirements increase by 2,600 jobs or a 7-percent increase from 2017 levels. Renovation and maintenance work adds 1,900 jobs or a 5-percent increase. Figure 10 shows the residential employment change by sector in Alberta. Aging demographics continue to be a source of concern for all provinces, including Alberta, which has a relatively young population. Retirements are expected to compound over the coming decade as the effect of aging begins to take hold in the province. Residential construction will need to replace an estimated 16,900 workers, or 20 percent of the 2017 workforce who are expected to retire over the coming decade. Figure 10: Residential construction employment growth outlook, Alberta 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada 26 RESIDENTIAL SUMMARY HIGHLIGHTS

27 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY In 2017, Alberta s residential construction activity showed signs of recovery from significant declines in Employment growth of 1,400 jobs was met by growth in the labour force of equal magnitude. Following several years of decline, employment is expected to rise across the scenario period, and 4,600 new jobs are expected to be created by Adding to demand requirements is the need to replace an estimated 16,900 workers expected to retire over the next decade. These increased requirements are partly offset by an estimated 14,700 new entrants expected to be drawn from the local population. Industry will still need to recruit an additional 5,400 workers from outside the local residential construction industry through in-mobility to meet long-term demand requirements. High unemployment was rampant in 2016, and the balanced labour market conditions signalled by 3s in 2017 (see Table 16) reflect a period of transition and the recovery underway. Unemployment is expected to remain somewhat elevated, but unique localized labour demands (e.g., new housing in Fort McMurray) may create potential short-term recruiting challenges. Future labour market conditions anticipate a moderate strengthening in new-housing demands and rising renovation activity with mostly balanced conditions. Over the long run, industry may need to recruit back some of the workers lost during the recent downturn. For Alberta, residential rankings are reported for 25 of the 34 covered trades and occupations. 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR ALBERTA 16,900 14,700 5,400 4,600 RETIREMENTS NEW ENTRANTS NET MOBILITY EMPLOYMENT CHANGE Table 16: Residential market rankings, Alberta TRADES AND OCCUPATIONS RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Electricians Floor covering installers Gasfitters Continued on next page RESIDENTIAL SUMMARY HIGHLIGHTS

28 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Table 16: Residential market rankings, Alberta (continued) TRADES AND OCCUPATIONS RESIDENTIAL Glaziers Heavy equipment operators (except crane) Heavy-duty equipment mechanics Home building and renovation managers Insulators Painters and decorators (except interior 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 Tilesetters Trades helpers and labourers Truck drivers Source: BuildForce Canada BRITISH COLUMBIA The British Columbia forecast was generated prior to the tabling of the province s budget on February 20, As such, the assumptions and trends reported reflect pre-budget market conditions and do not take into account the impact of any new measures that may impact residential construction in BC s metropolitan areas. Strong economic growth, employment prospects, and high levels of immigration led to peak levels of residential activity and labour market challenges in Expansion in all segments of residential construction contributed to project delays and strong levels of activity, carrying many projects over into These pressures are expected to ease over the coming decade. Substantial increases in residential activity were prominent in the Lower Mainland and driven primarily by active high-rise construction, renovations, and maintenance work. Labour force challenges in the Lower Mainland, especially in Vancouver, were exacerbated by housing availability and affordability, which can be a barrier to regional labour mobility to meet rapidly rising demands. New homebuilding activity is anticipated to slow over the coming decade, with 2017 marking the apex of new-housing employment requirements. Population growth is projected to slow compared to the previous decade, driven by an aging population and lower levels of in-migration. Any expected slowing of new-housing construction will be absorbed by steady growth in renovation and maintenance work, as British Columbia s considerable housing stock increasingly demands additional renovation and maintenance activity. Across the scenario period, divergence between residential markets translates into overall residential employment receding by 10,800 jobs, or a 10-percent decline from a very strong 2017 peak. New-housing employment requirements contract by 23,700 jobs or a 38-percent decline from 2017 levels. Employment declines are concentrated over the first eight years of the scenario period, with as many as 27,200 jobs lost between 2018 and A moderate recovery adds 3,500 jobs over the tail end of the scenario period. Renovations and maintenance are expected to remain as steady sources of new employment over the outlook period, adding nearly 13,000 new jobs across the next decade. Growth in these segments may provide opportunity for displaced homebuilders, as renovations and maintenance are anticipated to account for nearly six in 10 residential jobs by Figure 11 shows the change in residential employment by sector in British Columbia. Despite the anticipated slowing of new-housing activity, industry must remain focused on attracting, training, and retaining qualified workers. Succession planning will be of paramount importance to British Columbia as the province grapples with the replacement of 28 RESIDENTIAL SUMMARY HIGHLIGHTS

29 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY 10-YEAR RESIDENTIAL WORKFORCE OUTLOOK FOR BRITISH COLUMBIA 23,100 17,900 RETIREMENTS NEW ENTRANTS -10,800-7,200 EMPLOYMENT CHANGE NET MOBILITY Figure 11: Residential construction employment growth outlook, British Columbia Maintenance Renovations New housing Source: Statistics Canada, BuildForce Canada 23,100 residential workers, or 20 percent of the current workforce expected to retire over the coming decade. Aging demographics limit population growth in the province, and the number of retirements is expected to outpace the number of firsttime new entrants aged 30 and younger estimated to be drawn from the local population. Meeting future demands may require industry to attract underrepresented groups such as women, Indigenous Canadians, and immigrants. British Columbia s residential construction activity likely reached its apex in 2017, as indicated by the creation of 5,600 jobs compared to the previous year. This rapid increase in residential construction activity was met partially by workers returning from eastern RESIDENTIAL SUMMARY HIGHLIGHTS

30 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD provinces, as labour force growth of 6,700 workers outpaced demand and led to an increase in unemployment of 1,100 workers. Coming off very strong levels of activity in 2017, employment is expected to decline across the scenario period with a loss of 10,800 jobs, a 10-percent decline compared to While activity slows, industry must address an aging workforce and an estimated 23,100 residential construction workers expected to retire over the next decade. Retirements are partly offset by an estimated 17,900 new entrants that are expected to be drawn from the local population. As activity slows across the scenario period, an estimated 7,200 workers are expected to leave residential construction through out-mobility. Looking at Table 17, tight labour markets in 2017 reflect the prolonged build-up in residential employment requirements and falling levels of unemployment. Anticipated declines in 2018 will help to ease labour market pressures, with overall market conditions returning to balance for most trades and occupations, as signalled by a rank of 3. Conditions may remain tight for some trades in the Lower Mainland, as project delays carry work over into Increasing renovation demands are expected to partially offset anticipated declines in new housing construction, maintaining generally balanced labour markets across the scenario period for many trades. Conditions for trades and occupations more concentrated in new housing are expected to weaken in 2018 and 2019 relative to very strong levels in 2017; however, overall new housing remains well above historical levels of activity across the outlook period. For British Columbia, residential rankings are reported for 27 of the 34 covered trades and occupations. Table 17: Residential market rankings, British Columbia TRADES AND OCCUPATIONS - RESIDENTIAL Bricklayers Carpenters Concrete finishers Construction estimators Construction managers Contractors and supervisors Crane operators Electricians Elevator constructors and mechanics Floor covering installers Gasfitters Glaziers Heavy equipment operators (except crane) Home building and renovation managers Insulators Ironworkers and structural metal fabricators Painters and decorators (except interior 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 Continued on next page 30 RESIDENTIAL SUMMARY HIGHLIGHTS

31 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Table 17: Residential market rankings, British Columbia (continued) TRADES AND OCCUPATIONS - RESIDENTIAL Tilesetters Trades helpers and labourers Truck drivers Welders and related machine operators Source: BuildForce Canada REPLENISHING A RETIRING WORKFORCE Retirements will outpace new entrants to the residential sector, meaning industry will need to remain focused on workforce recruitment despite the projection that Canada-wide, both residential and non-residential construction activity is expected to slow compared to strong levels of growth over the last decade. Accordingly, industry must remain focused on attracting, training, and retaining new workers as it grapples with replenishing a retiring workforce. Set against aging demographics, industry must contend with replacing an estimated 255,000 workers expected to retire over the coming decade; 48 percent or 122,000 workers from the residential workforce. This translates into the exit of two in 10 construction workers to retirement and represents a significant loss of skills and experience that will require industry to proactively approach long-term recruiting strategies. Demographic shifts will play a significant role in Canada s labour markets over the coming decade, as the country faces an aging population and slower population growth. Across the scenario period, population growth averages 0.9 percent per year, which lags the 1.1 percent experienced over the previous decade ( ). Canada s aging population should produce a steady decline in the natural rate of population growth (births less deaths), making immigration a key driver of population growth over the next 10 years. Widening the gap between the number of births and deaths over the long run will only be partly offset by immigration, though not enough to significantly reverse the trend based on current immigration levels. Figure 12 illustrates the components of population growth for Canada. Figure 12: Sources of population growth (%), Canada Increase due to natural growth (births less deaths) Increase due to net in-migration Total population growth Source: Statistics Canada, BuildForce Canada ( ) RESIDENTIAL SUMMARY HIGHLIGHTS

32 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Even as Canada s construction industry enters a slower growth period, labour markets may be strained during peak periods. A key driver of employment requirements over the next 10 years will be replacing industry s aging workforce. Over the past decade, the share of the population in the older age bracket (65 years and over) increased significantly, while the share of the population in their prime working age (25-54 years old) has been declining. Over the next decade, the share of the population in the older age bracket is expected to increase substantially, while at the same time, the share of the population in their prime working years is expected to continue declining. Additionally, the share of the population that is potentially available to enter the workforce (15-24 years old) is also in decline, which is likely to result in potential recruitment challenges for the construction sector. Table 18 shows Canada s population age distribution in 2017 and As a considerable share of the population moves into the older age bracket, the labour force participation rate (percent of the population 15 years and older in the labour force) is expected to fall steadily. Replenishing a retiring workforce may become increasingly difficult, as all industries will compete for a relatively smaller pool of youth. Sustaining Canada s current construction workforce over the long run may require industry to strengthen initiatives to better engage youth and underrepresented groups. Based on historical hiring trends, Canada s construction industry is expected to draw an estimated 226,000 first-time new entrants aged 30 and younger from the local population over the next 10 years. During the scenario period, the retiring workforce exceeds the youth coming into the industry. Of the total new entrants, an estimated 100,000 are expected to be drawn into residential construction; below the 122,000 expected to exit the industry due to retirements. With retirements exceeding new entrants in many regions, the construction industry will need to increase its share of recruitments from other industries and from traditionally underrepresented groups in the industry such as Indigenous people and women, and as a last resort, from offshore, to keep pace with anticipated demand. Canada s Indigenous population has the highest rate of population growth and a higher propensity to choose construction as their career Table 18: Population age distribution (%), Canada AGES 2017 Source: Statistics Canada, BuildForce Canada choice. An estimated 11 percent of all Indigenous people in the country work in the construction sector; almost 4 percent of total industry employment. Women are another underrepresented group in Canada s construction industry, currently representing approximately 12 percent of the country s total construction workforce. An estimated 26 percent of women working in construction work in direct trades and occupations, while the remaining 74 percent work in administrative and management-related occupations within the construction industry. This translates into women representing 4.1 percent of Canada s direct construction workforce. While female employment in construction trades and occupations has risen over the recent past, the share of women had been fairly stagnant to Rapid growth in residential, commercial, and institutional building construction in 2017 has, however, improved women s representation in the industry, as women tend to choose occupations concentrated in these sectors. Figure 13 illustrates the share of women in direct trades and occupations based on current recruitment patterns of females into the workforce. Data is unavailable to isolate trends specific to residential construction. 10-YEAR AVERAGE BY % 400, , , % POPULATION GROWTH BIRTHS DEATHS NET IMMIGRATION AVERAGE AGE OF CONSTRUCTION WORKFORCE PERCENT OF CURRENT LABOUR FORCE LOST TO RETIREMENT 32 RESIDENTIAL SUMMARY HIGHLIGHTS

33 CONSTRUCTION AND MAINTENANCE LOOKING FORWARD RESIDENTIAL SUMMARY Figure 13: Share of women in direct trades and occupations, Canada Share of females in direct trades and occupations* * Direct trades and occupations refers to the 34 trades and occupations tracked by BuildForce Canada, which excludes administrative-type occupations. Source: BuildForce Canada calculations based on Statistics Canada s Labour Force Survey (LFS) and 2011 National Household Survey (NHS) Table 19: Construction employment by gender, Canada (total direct trades and occupations) ,073,800 1,060,800 1,066,400 1,074,200 1,075,400 1,070,700 1,064,700 1,065,400 1,073,500 1,081,000 1,088,300 46,200 49,900 48,500 46,800 46,700 46,300 45,900 45,700 45,800 45,900 46,000 Source: BuildForce Canada calculations based on Statistics Canada s Labour Force Survey (LFS) and 2011 National Household Survey (NHS) In 2018, continued growth in commercial and institutional building activity, combined with weakening engineering construction activity, should lead female employment higher, while male employment should decline slightly, as the latter should feel a greater impact from receding engineering activity. Subsequently, the share of women in direct trades and occupations is expected to reach a peak in 2018 before winding down and stabilizing near 4.1 percent. Table 19 shows the anticipated employment in direct trades and occupations by gender for Canada. Data is unavailable to isolate trends specific to residential construction. The diverse construction industry among Canada s provinces, as well as pre-existing recruiting patterns and occupational choice among women, lead to some provinces being more effective at attracting women into the construction trades. Western provinces have been generally more successful at attracting women into the RESIDENTIAL SUMMARY HIGHLIGHTS

34 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Figure 14: Distribution of female construction employment, 2017, Canada Canada 26% 74% Saskatchewan Nova Scotia Newfoundland and Labrador Manitoba British Columbia Alberta Prince Edward Island Ontario New Brunswick Quebec 37% 33% 30% 30% 28% 28% 28% 26% 25% 16% 84% 63% 67% 70% 70% 72% 72% 72% 74% 75% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Direct trades and occupations Administrative and management-related occupations * Direct trades and occupations refers to the 34 trades and occupations tracked by BuildForce Canada, which excludes administrative-type occupations. Source: BuildForce Canada calculations based on Statistics Canada s Labour Force Survey (LFS) and 2011 National Household Survey (NHS) industry and construction trades. Saskatchewan has done particularly well at attracting women into direct skilled trades and occupations, and although women only account for 10 percent of total employment, nearly four in 10 women employed in construction work directly on construction projects. Similarly, Nova Scotia s focus on engaging and training youth into construction trades has led to increasing interest by women, with approximately one third of women employed in direct trades and occupations. Alternatively, although Quebec s construction industry is made up of approximately 13 percent women, nearly 85 percent of them work in administrative and management-related occupations. Figure 14 shows the distribution of female employment within construction. Data is unavailable to isolate trends specific to residential construction. CONCLUSIONS AND IMPLICATIONS Declining activity in new housing may leave a false impression of weaker labour markets, when in fact, conditions are expected to be mostly balanced across the decade. As employment levels trend lower, unemployment rates are expected to decline, as exits from the labour force outpace moderate employment declines. In isolated cases, some provinces may have difficulty finding qualified workers during projected up-cycles. Maintaining workforce capacity means industry will need to remain focused on efforts related to recruiting, training, and retaining young workers. Recruiting across the scenario period may become increasingly difficult, as Canada s industries will be competing for a relatively smaller pool of youth. Moreover, industry will need to encourage the transfer of skills from experienced workers to junior tradespeople, as retiring workers take with them years of accumulated skills. 34 RESIDENTIAL SUMMARY HIGHLIGHTS

35 RESIDENTIAL SUMMARY CONSTRUCTION AND MAINTENANCE LOOKING FORWARD Meeting future demands may require increased initiatives to engage underrepresented groups, including women, Indigenous Canadians, and new immigrants. The labour market changes are reflective of changing demographics in the labour force and Canada s residential construction sector entering a period of slower growth over the next decade compared to the previous 10 years. Slowing population growth is anticipated to limit demand for new housing, lowering housing starts and new residential investment. Overall residential employment is projected to decline; however, declines are modest as growth in renovation and maintenance sustain demand requirements. The outlook scenario shows that Canada s aging population and the related slower growth (or decline) in the natural change in population (births less deaths) is reducing new-housing demands, especially in the latter part of the scenario period. Renovation activity over the period continues to grow, however, and offsets much of the decline in new-housing activity. While the trend in residential activity is lower, there are distinct cycles across provinces, but lower population growth dominates, and residential employment declines modestly across the scenario period. Anticipated declines in new housing are more concentrated in the latter half of the scenario period. Moderate, but steady growth in renovation and maintenance work absorbs the bulk of the declines in new housing. Residential construction is expected to see a loss of 12,500 jobs, or a modest 2-percent decline in employment across the scenario period. Retirements (122,100) outpace new entrants (100,400) to the labour market, resulting in balanced or tight labour markets and a need for industry to continue recruiting, training, and retaining young workers. 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 stakeholders to better track labour market conditions and identify potential pressure points. The anticipated labour market conditions reflect the current long-term economic outlook and industry major project assumptions. Any changes to these assumptions presents risks and potentially alters anticipated market conditions. 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: Funded by the Government of Canada s Sectoral Initiatives Program 35 NATIONAL SUMMARY HIGHLIGHTS Phone: I info@buildforce.ca The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada MARCH 2018

36 Performance Management Benchmarking Self-Assessment Tool The Performance Management Benchmarking Self-Assessment Tool is designed to assist construction and maintenance employers in measuring their organization in relation to a specific set of recognized best practices. In addition, you will be able to compare your organization s efforts against other construction and maintenance employers. From the results of the self-assessment tool you will also be able to identify areas for continuous improvement. Respectful and Inclusive Workplace initiative The objective of this three-year project (at midpoint) funded by the Status of Women is to support the retention of people from different genders, backgrounds, and circumstances in the construction and maintenance industry by providing employers with practical tools and resources to create a respectful and inclusive workplace for everyone. The project will result in tools and resources to assist small, medium, and large construction industry organizations in: assessing their current situation and identifying where they may need to make changes training their workforce on creating and participating in an inclusive, respectful workplace creating a policy framework that supports a respectful and inclusive workplace supporting the policy with implementation strategies, including: safe reporting and remediation procedures recommended communication strategies management and employee training Check out the Respectful and Inclusive Workplaces blog at We are looking for companies to test the tools from May Sept If interested, please contact us at communications@buildforce.ca.