Looking for Tenders

Article

Construction CEOs told the worst is behind them now

0 44 Home

by Brian Martin

The great recession is good and truly over. That was the word from Jock Finlayson, executive vice-president of the Business Council of British Columbia.

Buildex Vancouver

The great recession is good and truly over. That was the word from Jock Finlayson, executive vice-president of the Business Council of British Columbia.

He was speaking at the invite-only CEO breakfast kicking off Buildex Vancouver.

The recovery, while solid, will be slow and steady, he predicted. But also, there is no second boom waiting just around the corner.

The dramatic global financial collapse of 2008 has left the world battered and bruised. The results were many, said Finlayson, and they include:

•The emergence of global excess capacity, putting downward pressure on prices and margins across a range of traded industries;

•Higher unemployment especially in “advanced” nations;

•Deterioration in government finances, particularly in industrial countries with the risk of sovereign defaults (with Greece much in the news);

•Doubts over the future of the U.S. dollar;

•Shrinkage of financial sectors in many countries;

•Re-pricing of risk.

Canada generally and British Columbia specifically got off relatively lightly in the recession, he said.

Even the U.S., which was hit more harshly than Canada, did well compared to countries in Europe or Japan, he said.

The dramatic collapse in American housing starts, of course, had a major impact on British Columbia’s largest resource industry – forestry.

By far hardest hit in terms of employment, however, was B.C.’s construction industry which saw a huge 25.4 per cent drop in employment from 2008 to 2009.

However, things are definitely on the mend when it comes to construction, Finlayson said.

He reminded the audience that their industry is extremely important to the economic health of the province and employs more than 200,000 people, which is nine per cent of all jobs in the province.

The outlook, said Finlayson is positive.

Currently the residential sector is leading the recovery, but the non-residential sector, however, is getting a lift from fiscal spending programs undertaken by every level of government.

The economic fundamentals are strong over the medium term for B.C. he said.

Finlayson pointed to economic growth, population growth and shifting trade patterns.

He also reminded the construction group of a number of large projects underway such as the Port Mann Bridge, the South Fraser Perimeter Road, several hospital projects and hundreds of millions of dollars that are planned to be spent upgrading the ports in the Metro Vancouver area.

B.C., he said, has a competitive tax structure and is seeing significant investment going into infrastructure such as airports, ports, highways and energy.

It remains an attractive destination for immigration resulting in continued population growth.

In addition, the American economy, specifically housing starts, is showing early signs of a recovery.

Asia’s growing economic clout has become very important, he said.

While B.C. has been weighed down by the slow recovery in the U.S., it is well positioned to take advantage of the booming economy in China.

China’s GDP growth in the first quarter of this year was 11 per cent annualized.

In 2009, it was almost nine percent.

“China’s fast rebound is helping to lift the rest of Asia, as well as benefiting commodity exporters such as British Columbia,” said Finlayson.

There are also some challenges facing B.C., he added.

He pointed to the rising value of the Canadian dollar, which threatens the province’s competitive position, an aging population and a limited export base outside of resources and tourism.

Finlayson also mentioned the aftermath of the pine beetle infestation, which is thought to have destroyed about 25 per cent of the province’s forest inventory.

While the forest industry will recover, he said, they will never again be the size they were 20 years ago.

In conclusion, Finlayson said there are a growing number of positive signs for the global and North American economies.

Finlayson said B.C.’s economy is now recovering and added that the Olympic Games helped kick-start the 2010 economic upswing.

He added that British Columbia now needs a post-Olympics prosperity agenda.

Related tags

Leave a comment

Or register to be able to comment.

Copyright ConstructConnect TM. All rights reserved. "ConstructConnect" is a dba for CMD Holdings.
The following rules apply to the use of this site:
Terms of Use and Privacy Statement