September 24, 2012

CCA hosts North American Construction Federation meeting

PATRICIA WILLIAMS

DCN staff writer

Each year, senior staff and elected officers of national construction associations in Canada, the U.S. and Mexico meet under the umbrella of the North American Construction Federation to exchange notes on items of common concern.

This time, the Canadian Construction Association (CCA) hosted the event.

On the agenda for the Aug. 22 to 24 meeting were a range of topics, including industry health, project delivery methods, foreign competition, and workforce recruitment and development.

“It’s a three-way street,” said CCA president Michael Atkinson.

“I think all of the organizations have learned from each other and been able to identify issues, trends or developments that are going to have an impact and as a result, be better prepared to deal with them.”

An overview of the industry’s economic status and outlook were provided by the CCA and its partners in the federation, the Associated General Contractors of America (AGC) and the Mexican Chamber of the Construction Industry.

Atkinson said Canada is sitting pretty thanks to the absolutely solid state of the banking and financial community, stability at the federal government level and a pretty aggressive infrastructure spending program being planned federally and in some of the provinces.

“There is a lot of pent-up demand in our resource sector, and that’s going to mean large projects,” he said.

“Ten or 15 years ago, you could count on one hand the number of individual projects valued at $1 billion or more. Now, there are more than 30 of these projects either planned or underway.”

Total construction investment in 2012 is expected to be about $282 billion, up eight per cent from 2011.

By 2013, total construction investment will likely surpass $300 billion.

Total construction employment in Canada currently sits at 1.27 million, which is beyond the pre-recession record highs of just more than 1.26 million.

In the U.S., construction spending has declined by about 37 per cent from 2006 to 2011.

Spending in 2012 has slowly begun to rise due primarily to gains in the private non-residential and residential markets.

The public market, however, continues to see significant spending cuts.

Construction employment has mirrored the spending decline with about two million construction jobs lost over the past 4.5 years, the AGC reported.

Construction unemployment currently sits at around 12.8 per cent, down from the 15.6 per cent in 2011.

However, there have been no increases in construction jobs in two years.

Atkinson said the U.S. contractors’ association attributes the drop in the unemployment rate to unemployed workers leaving the industry, going back to school or simply giving up looking for work.

In Mexico, construction Gross Domestic Product (GDP) increased by 4.8 per cent in 2011 and is projected to grow by a further 4.9 per cent in 2012.

Atkinson said the Mexican chamber projects that construction GDP will double in the next six years, given an aggressive public infrastructure program. Construction employment in Mexico currently sits at about 5.9 million, which is up about 4.5 per cent from last year.

“They always seem to have some energetic infrastructure programs,” he said. “The question is whether they can attract the private financing they need. The government tends to rely on leveraging private capital for some of these projects.”

Atkinson noted that the Mexican government has introduced a new law pertaining to public-private partnerships (P3).

“The Mexicans were very interested in our experience with P3s,” he said. “We were able to point to some of the litmus tests that have been used in Canada to assess whether a particular construction project would lend itself to a P3 approach.”

Economics aside, Atkinson said one issue “that is hitting everyone between the eyes” at least in Canada and the United States is demographics as the industry grapples with an aging workforce.

“We saw a lot of agreement from the Americans on this,” he said.

Next year’s meeting is scheduled to be held Aug. 1 to 3 in San Francisco.

Atkinson said the meetings have proven to be extremely useful in forging close working relationships between senior staff and elected officers of the three organizations.

“There would be absolutely no hesitation on either side to pick up the phone if some issue arose,” he said.

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