The Canadian construction industry faces challenges in 2023, with an anticipated contraction of 5.2%. The decline is primarily driven by reduced residential construction activity due to tightening monetary policies and a weaker economic outlook.

As early as Q1 2023, evident weaknesses emerged in the residential and institutional construction sectors, marked by year-on-year declines of 10.7% in new residential construction investment and 6.4% in new institutional construction investment.

However, the industry is expected to see growth between 2025 and 2027, with an annual average rate of 2.7%, supported by advancements in the industrial, energy, and transportation sectors.

However, increased investments in the manufacturing, transportation, and energy sectors, in addition to regional and federal government investments, will provide support for the overall construction industry, helping to generate growth momentum later in the forecast period.

The Federal government released the first Budget Estimates for the financial year 2023-24 in February 2023, totalling CAD432.9 billion ($335.9 billion) in expenditures, including CAD198.2 billion ($153.8 billion) in budgetary expenditures for operating and capital expenditures.

Last year, the province of Ontario unveiled its 30-year transit plan, which will cost CAD84.7 billion ($65.7 billion) over the next ten years to develop a transportation network focused on the construction of new highways, rail corridors, and subway systems. A large portion of output over the forecast period is expected to be supported by industrial projects.

The publisher estimates the project pipeline of metal and material processing plants projects to be CAD122.7 billion ($95.2 billion) as of June 2023, followed by CAD59.2 billion ($45.9 billion) of chemical and pharmaceutical plants projects, and CAD28.6 billion ($22.2 billion) in the construction of manufacturing units, with completion scheduled between 2024 and 2030.

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