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Construction Industry Ponders Sustainable Human Resources Aging Workforce Prompts Fears of Skill Shortage
July, 2008
Canada's construction labour force grew by an unprecedented 42,000 workers in 2007 and projections indicate a continued high demand in the coming years, both to keep pace with new projects and to replace up to 162,000 workers expected to retire over the next eight years. The following is an excerpt from Construction Sector Council's national summary and forecast - Editor.
Construction activity has been growing steadily for more than ten years. Construction is usually a volatile industry, but since the industry hit the low point of the recession in 1996, there has been a year-after-year expansion. Labour requirements in Canada have grown to a record high level in 2007.
National employment in the entire construction industry rose by almost 3% from 2002 to 2007. In most provinces, the construction expansion began in residential building, which lasted until 2004 to 2005.
Non-residential construction was less regular in its growth in the early years, but strong government-led building in such areas as schools, hospitals and other infrastructure began in earnest in 2006. The global rise in commodity prices is propelling the current expansion, increasing engineering and heavy industrial building.
RESIDENTIAL & ICI DEMAND
Residential construction covers both new housing, and repairs and renovations. These two components of residential construction are equal in size. In general, trades that specialize in this sector enjoyed above-average employment growth at the start of decade.
These trades and occupations include: bricklayers; floor covering installers; gasfitters; glaziers; painters and decorators; plasterers, drywall installers and finishers; residential and commercial installers and services; roofers and shinglers; tile-setters; trades helpers and labourers. All these trades also work in commercial and institutional construction.
Another group of trades associated more specifically with industrial, institutional and engineering projects experienced slower employment growth in many markets during the 2001-2004 period. These trades include: boilermakers; construction millwrights and industrial mechanics; construction managers; contractors and supervisors; crane operators; drillers and blasters; heavy equipment operators; heavy duty equipment mechanics; insulators; ironworkers; steam, pipe and gasfitters; truck drivers and welders. Beginning in 2005, these trades began very strong growth, especially in Alberta and the oil sands projects.
Other trades working across all sectors experienced average employment growth rates. These include: carpenters; concrete finishers; electricians; plumbers; refrigeration and air conditioning mechanics; and sheet metal workers.
Among the provinces, the boom in Alberta may be the most publicized example of these patterns. By 2001, construction in Alberta had already doubled from the previous low point. British Columbia was a later starter in this expansion, but has by far the most rapid growth in employment after 2001.
ATTRACTING NEW ENTRANTS
The current high level of employment and continuing growth in demand has focused the industry's attention on finding new workers at every level. Attracting unskilled new entrants - often in competition with other industries - into training programs is a major activity.
The immediate and urgent need is for qualified and experienced workers. As projects continue to be announced, the recruiting process reaches into more distant markets.
The workers needed from 1996 to 2000 were supplied in large numbers from the unemployed and the return of construction workers from other industries. Many of these workers left construction during the 1990-1996 recession. By 2000, this source had been exhausted and the first concerns about shortages were heard.
Weakness in manufacturing, tourism and other industries between 2001 through 2005 helped recruiting and limited shortages as construction continued to expand. The big jump in employment from 2004 to 2006 drove unemployment down and created new recruiting pressures.
One measure of the national shift in human resources into construction is measured by the 4 to 5% annual increase in the industry's labour force, while the total national labour force rose just 1%. A large portion of the additions to the national workforce was being drawn into construction. This major structural shift gathered momentum through numerous industry promotions and major investments in training and apprenticeship.
RETIREMENT FACTORS
The calculation of demand related to retirement estimates the number and proportion of the workforce in each trade that is expected to leave the labour force (retire or die) and be replaced between 2007 and 2016 to sustain the workforce present in 2006.
The age profiles for trades in Alberta are well below the national average, while New Brunswick and Newfoundland and Labrador face much older populations. The biggest impact is foreseen for the end of the forecast period when the proportion of the labour force leaving approaches 4% of the workforce each year for the older trades and occupations.
This is a very large recruiting challenge if these trades need to be replaced. At this point, the annual increase in the population and labour force in Canada may well fall below 1%.
Over the long term, the ebb and flow of building cycles will limit the workforce requirements, but the structural shift in demographics places a rising requirement on the industry to recruit and train new tradespeople. For provinces with younger age profiles and expanding construction late in the forecast period, the retirement issue will be just one component of a broader economic strategy to attract new immigrants and integrate them into the provincial workforce.
TRAINING AND CERTIFICATION
Each province offers a unique set of circumstances, but the following comments apply to most programs:
( Provincial systems have been expanding across the 1996-2007 period.
( In some provinces and trades there was a pause in the expansion of some programs.
( New technology is driving the need for more training and facilities.
( Many trades are targeting higher levels of certification and training in their workforces.
( Rates of completion for some trades are lower than needed for the projected increase in labour requirements.
Across most regions and trades, registrations and certifications have been expanding in order to keep pace with increasing trade requirements. Training demand will continue to grow, however, especially related to the expected retirement of certified tradespeople.
While some of the occupations do not have apprenticeship programs, many do. In particular, the industrial and engineering trades require full apprenticeships, and many of these apprenticeship programs are compulsory in some provinces. Many of the best people working in these trades are certified in more than one trade and have post certificate-of-qualification training in specialties.
Construction managers and contractors and supervisors have been included in the critical list of trades and occupations in response to general observation that these key leaders are in particularly short supply. For these groups, trades training is often the starting point and additional training and certification is important for building skills and recognition. Programs in support of this effort are expanding across Canada, but there remains evidence that the shortage of skill depth and experience in this group might be the most serious constraint.
For more information, see the Construction Sector Council web site at www.csc-ca.org.
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