Alberta Construction Industry Faces 3-Year Downturn

March 18, 2015

Declining oil prices are having an impact on Alberta, Canada's construction industry, resulting in new project cancellations, delays and job losses. The industry is expected to rebound after a three-year downturn, according to the latest forecast from BuildForce Canada.

"While it's early to pinpoint when that will happen, our forecast projects a near-term recovery, with jobs in engineering construction rising gradually from 2018 to 2024, as oil prices come back up," said Rosemary Sparks, executive director of BuildForce Canada.

BuildForce Canada's 2015-2024 Construction and Maintenance Looking Forward forecast shows falling oil prices are slowing Alberta's investment in new major capital projects. Sustaining capital projects and maintenance of existing facilities, however, are continuing, and this work accounts for a significant share of total oil sands investment.

New project delays result in job losses from 2015 to 2017, primarily in engineering and residential construction. A modest down cycle, followed by gradual growth, drives up institutional, commercial and industrial construction employment across the outlook period.

Oil prices are projected to rise after their fall in 2014-2015. As prices recover, oil sands investment resumes, with production supported by pipeline and other infrastructure that is now being planned and built. By 2024, construction employment is up 6 percent from record levels in 2014, with job gains in all markets.

BuildForce Canada's forecast also shows:

  • Maintaining and sustaining current operations and equipment provides stable work for a large and growing segment of the construction workforce.
  • Falling oil prices trigger a new housing cycle, resulting in job losses between 2017 and 2018, followed by moderate recovery when housing starts rise close to current levels by 2024. The home renovation market adds jobs across the outlook period.
  • The construction industry needs to hire more than 36,000 new workers to counter rising retirements over the next 10 years.