Trade uncertainty and commodity pricing temper optimism in Canada
Our 2020 Canadian market intelligence report is out now, examining economic conditions and outlooks across the country for the construction sector.
With solid provincial wage growth and the possibility of lower interest rates, Canada’s economic outlook for 2020 is relatively positive. However, a negative or delayed resolution in the USA-China trade negotiations may hinder growth, given Canada’s significant exposure to international trade.
Gerard McCabe, Managing Director, Canada, comments:
We see a number of positive signs for the Canadian economy that will help to underpin growth. There is low unemployment, inflation has remained controlled and wage growth is positive. Prices on steel and aluminum have stabilized following the conclusion of trade negotiations and the removal of tariffs.
The report finds non-residential construction investment is unlikely to see a marked increase over the year, but the moderate project pipeline should help some construction markets remain buoyant. Infrastructure and transport projects will drive construction through 2020–21 while other sectors remain subdued.
The residential sector is forecast to make a modest recovery over 2020, though will be limited by household debt, which is expected to reach an all-time high.
According to McCabe:
The trends across Canada’s construction sector are clear: tight labour markets, and specifically the lack of skilled trades, will continue to slow developments and economic growth. Similarly, external factors like trade disputes will impact demand, which in turn will potentially impact commodity pricing.