Gloomy outlook from Northern contractors on 2018 building season

Very few contractors in Northern Ontario have something to crow about heading into the 2018 construction season.

The Ontario Construction Secretariat (OCS) released its annual contractor survey of the outlook on the industry in early March.

Overall in Ontario, 32 per cent of contractors expect to do more business in 2018, than they did last year. Fifty-one per cent expect to do the same amount of work this year as in 2017. About 16 per cent are forecasting less.

The OCS survey reveals a slightly less confident picture than in 2017 when 35 per cent expected to do more business and 14 per cent projected less.

Aside from Northern Ontario, about one-third of contractors in each of Ontario’s regions forecasted an increase in their business activity in 2018.

Thirty-four per cent of contractors in Southwestern and Eastern Ontario expect to do more work this year compared to 33 per cent in Central Ontario and 32 per cent in the GTA.

Only 22 per cent of Northern Ontario contractors expect to do more work with 24 per cent forecasting to do less.

Ontario’s engineering sector has the most optimistic outlook, with almost half (47 per cent) of contractors in the sector forecasting engineering work to increase in 2018, and a further 36 per cent forecasting activity to stay at the same level as 2017.

The province’s industrial builders were the least optimistic bunch, with just over a quarter (27 per cent) of contractors forecasting an increase in construction activity, while five percent less (22 per cent) are expecting a decrease in activity. Forty-eight per cent expect industrial activity to stay at the same level as 2017.

The majority of Northern Ontario contractors (57 per cent) expect the majority of their work to come from maintenance work compared to 43 per cent looking at new construction projects.

Firms both in the North and Central Ontario expect to go outside of their region for nearly a quarter (23 per cent) of their work, compared to 77 per cent inside their region.

More than half (53 per cent) of contractors in Ontario expect to win project privately or sole-source than through the bidding process (47 per cent). Companies in the North, Central and Eastern Ontario forecasted similar proportions.

Close to three-quarters of contractors in the North, Central and Southwestern Ontario expect to see work from repeat customers.

In facing competition, 58 per cent expect to see more from firms within their region over the next three years than from large firms from the outside coming in. Only seven per cent expect to see U.S. or international competition.

The Ontario Construction Secretariat (OCS) is a joint labour-management organization representing 25 unionized construction trades and their contractor partners in the industrial, commercial and institutional construction (ICI) sectors.

The contractor survey is designed to gauge ICI contractors’ expectations for their businesses and Ontario`s ICI construction industry in 2018.

The survey was conducted by phone with 500 ICI contractors from across Ontario in January and February 2018. Seventy percent of the contractors surveyed were trade contractors and 26 per cent were general contractors.

The regional breakdown was as follows: Central Ontario 25 per cent; GTA 31 per cent; Eastern Ontario 17 per cent; Southwestern Ontario 15 per cent; Northern Ontario 11 per cent.