Wednesday, October 10, 2012

Canada’s demographics will shape construction: expert

English: A map of Canada exhibiting its ten pr...
English: A map of Canada exhibiting its ten provinces and three territories, and their capitals. (Lambert conformal conic projection from The Atlas of Canada) (Photo credit: Wikipedia)

Canada’s changing demographics will continue to shape the context for the construction industry in terms of labour and the projects.
“Future changes will be much more significant than the changes we’ve seen historically,” said Ryan Berlin, economy and housing market analyst at Urban Futures, speaking at the recent 27th annual CanaData Construction Industry Forecasts Conference.
Based on attrition rates in the construction trades over the 1996-2006 period, Berlin forecasts a net loss of 57,000 people in the 55 plus age group in the industry over the following 10-year period.

Canada is entering into its third great demographic transition, one characterized by the aging of the Post World War II boom generation into retirement.“That’s 77 per cent more of a loss in this 10 year period than we saw in the previous decade. Just for this sector to stand still, recruitment has to increase by 77 per cent over what we’ve seen historically,” said Berlin.
Four demographic forces shape our future: aging, births, dying and migration. Canadian birth rates are lower than replacement rates and without migration there would be a decline of 3.2 million people of working age, 20 to 64 year olds, by 2041.
Going forward, Berlin expects the immigration to Canada to reach the level of about 250,000 or 260,000 people a year. Immigrants who come to Canada are mostly between the ages of 25 and 30 and come for school or employment.
If immigration is included in the outlook for Canada’s population, then the forecast shows the country growing from 34.5 million people to a little over 44 million people.
The Atlantic provinces, Quebec, Manitoba, Saskatchewan and the territories will continue to be challenged in garnering a bigger share of the population with a below average growth rate.
“Alberta [will see] the fastest relative growth along with B.C. Ontario [will see] above average growth and accounting for virtually half of all the additions to the Canadian population over the next 30 years.”
The aging population of Canada will impact the construction industry, particularly in the housing and health care markets.
As one Canadian ages, that person will go from a ground oriented dwelling to an apartment.
“Apartments see higher maintainer rates in the older age groups. As our population ages we should expect the demand for apartments would increase,” he explained.
The leading edge of the baby boomers is between 65 and 69 and Canada spends about $5,300 per person in health care, more than double it spends on the typical resident right now. Looking ahead 20 years, the leading edge of the baby boom is going to be 85 to 89 years old, and spending will increase dramatically by 265 per cent to just under $20,000 per person.
“A lot of this spending is going to be manifested in the need for new clinics to be built, for new specialty health centres and certainly for new hospitals as well.
“These demographic changes, in addition to impacting demand for certain services and sector, will also lead to increasingly constrained labour markets in Canada and this, in my opinion, is what represents the great challenge to achieving growth in our economy as a whole and in the construction industry specifically.”
Because a lot of Canadian growth is going to be in the over 65 segment of population, the labour force will grow at a rate of under one per cent. Today there are about 19 million people working in Canada and by 2041 that will about 24 million people.
In order to navigate the increasingly constrained labour market, Berlin instructed the audience to “focus on things you can control, not the stuff you can’t.” His “3Rs” for managing labour force change are: recruitment, retention and retraining.

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