Canadian Construction Set to Rebound in 2021

Canadian construction is rebounding in 2021

The Canadian construction industry is set to rebound in 2021 after a huge dip due to the pandemic according to a recent report from Vancouver-based real estate and infrastructure advisory firm BTY Group. They reported that this will happen alongside a rebounding GDP that is expected to grow by 4.1% to 4.9% in 2021, depending on if the pandemic is kept in check and the vaccine is widely distributed.

Consulting News reports that, unfortunately, some sectors will lag in recovery such as:


 - Airports and airlines

 - Hotels and hospitality

 - Brick and mortar retail


The rebound would still depend on a robust economic recovery supported by a speedy, successful and sustained vaccine rollout.

Overall construction starts are projected to jump from $60 billion in 2020 to $80 billion in 2021 according to BTY. The outlook is positive for all segments although the following will have the strongest upticks:


 - Multi-family residential

 - Industrial

 - Engineering

 - Roadwork


Unfortunately, office and retail will have flatter recoveries.

Infrastructure and renewables will be the top performing sectors and driven by substantial government stimulus spending and mega projects in BC, Quebec and Ontario. This will counterbalance the declines in the commercial and leisure sectors. The federal government's Growth Plan has committed an extra $10 billion to renewables, broadband, building retrofits, agricultural irrigation, and EV charging stations.


DataBid Ads - Win Essential Projects 728x90


Housing starts in 2020 were an estimated 172,000-213,000 and are expected to be between 211,00-213,000 in 2021 and between 202,000-208,000 in 2022.

BTY also projects moderate cost escalation for construction in Ontario (3% to 5%). A major factor lowering cost escalation is the low overnight interest rate, which is expected to remain at 0.25% until at least 2023. Other factors that are keeping the costs down are the low inflation rate, the country's recession and more competitive bidding.

Factors putting upward pressure on costs are as follows:


 - Higher lumber prices

 - Oil price increases

 - Skilled trade shortage

 - Reduced foreign suppliers

 - Added costs for COVID-19 safety measures 


An article in Remi Network states that Ontario's robust infrastructure program, bolstered by government stimulus spending will help offset sharp declines in other sectors and a projected dip in housing starts. Ongoing and proposed projects in the province include numerous healthcare, utilities, and transit projects such as the Eglinton, Hurontario, and Finch LRT. In terms of residential development, reduction in immigration is expected to damper overall demand in 2021, with residential properties in the suburbs continuing to outperform those in urban areas as a result of remote working.

Randstad reports that there is no shortage of big construction projects on the horizon. High-value public and private sector projects continue to break ground at a steady clip, despite challenges of the pandemic. 

Big investments in construction are planned across the country. The Community Infrastructure Improvement Fund has earmarked $150 million for repair and improvement of community infrastructure facilities across the country. 


Editor's note: This is, indeed, a confusing time for the construction industry. DataBid is working tirelessly to report and distill the news that can help you and your company make the right decisions and keep you up to date on the constant changes as they are made. We hope our coverage brings some clarity amid all the confusion.


CSP Notices Wide


Posted by Judy Lamelza

Need the details on a specific Project or Company?
See how DataBid can help your company find projects and increase your odds of winning.



Certificate Save Money
DataBid Ad - Try it for free now
DataBid Partner Ad - TradeTraks1