Canada market intelligence report 2020

Gerard McCabe

Managing Director

North America

Our latest Canada market intelligence report finds that trade uncertainty and commodity pricing temper optimism for the Canadian construction industry in 2020.

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 war may hinder growth, given Canada’s significant exposure to international trade.

Economic overview

Global growth has a more subdued outlook for 2020, in part due to geopolitical uncertainty surrounding trade wars, as well as country-specific factors such as Brexit and ageing populations.

Canada’s economy has a number of positive indicators that will help to underpin growth. There is low unemployment at 5.9 percent, inflation has remained controlled at 1.9 percent, just under the government’s target of 2 percent, wage growth is high at 4 percent p.a. and there is the possibility of fiscal stimulus in the form of a rate cut in 2020. Aside from these positive indicators, new business investment will likely remain subdued due to uncertainty looming in the global market.

Residential and non-residential sectors

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.

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.

Oil and gas driving economic growth

Net exports are dominated by oil and gas, the largest driver of economic growth in 2019. Forecasts predict a more normal pace of growth in 2020 due to weaker global demand and lower commodity prices, which is likely to limit new mining investments.

Overall, the country’s economy remains susceptible to the outcome of the USA-China Trade wars. Should a timely and positive outcome be reached for international trade, Canada’s economy could see a fast rebound.

For all the analysis and insights on the Canadian construction market, including the construction cost guide for a broad range of building asset classes for 11 cities across Canada download the full report, by completing this short form.

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Gerard McCabe
Managing Director

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