With milder weather conditions and snow melting quickly across the province at the time of this writing, sawmills reported having better log decks even though they were still contending with a limited amount of loggers. With the pandemic restrictions being lifted in various degrees over the past month, businesses have been able to increase operations, but still need to respect social distancing. Mill production has improved somewhat although not equally for all producers, nor for the species, grades and thicknesses. Contacts reported that sales of green and kiln-dried materials are strong, especially to the cabinet, flooring, furniture, and moulding and millwork sectors. Hard and Soft Maple, Birch, Basswood and Aspen are reported as strong sales items. The industrial markets were also reported as doing very well.
Pallet manufacturers are struggling to get supplies for their inventories. With the CP Rail strike, there is concern supply chains will continue to see disruptions and negatively impact small businesses. As well, concerns over escalating fuel costs have been cutting into profits, as has inflation.
Ash log availability has improved somewhat noted contacts, and green Ash lumber output was being absorbed quickly by end users and wholesalers. Demand is exceeding kiln-dried availability and pushing prices higher.
Aspen producers and suppliers are having no difficulty selling this species as demand remains strong, resulting in prices climbing. Kiln-dried inventories are thin, noted contacts.
With the housing sector strong on both sides of the border, Basswood demand for new builds and remodelling activity are making this species very popular for painted finishes, thus increasing its demand. There is still strong demand for Maple over Basswood, thus limiting supplies for the species and pushing prices higher as well. As for most Hardwoods, with the strong home construction and remodelling spending by consumers, it has had a positive impact on Hardwood business overall. The whitewoods are seeing a great benefit, as is Birch. Its versatility and lower cost compared to Hard and Soft Maple make it an attractive alternative to secondary manufacturers and wholesalers. With the strong demand, supplies are limited for kiln dried Birch. Green stocks are also strong, and supplies are growing which are easing the price pressures for this species.
Hard Maple continues to be a top seller due to the strong housing markets. However, some have substituted lower cost Hardwoods for cost savings considerations. Demand for green stocks has not been as good as this time last year, commented contacts. Soft Maple markets are strong they added. Some companies have shifted part or all of their raw material purchases to Soft Maple from Hard Maple. Kiln-dried supplies aren’t keeping pace with buyers’ needs, and prices are rising. Demand for green stocks is as good as for kiln-dried Soft Maple.
International market interest in Red Oak has picked up, led by demand from China. At the time of this writing, it was not known if tariffs would be extended or rolled back as the April 16th deadline approached.
White Oak sales are keeping green development production shipped for this species. Markets for kiln-dried White Oak are steady in Europe and the U.S., noted contacts.
BuildForce Canada said in its national forecast, 2022-2027 Construction and Maintenance Looking Forward, Canada’s construction and maintenance industry rebounded strongly in 2021 and is expected to continue growing through 2027. It notes that strong near-term demand and sustained activity in several key sectors present considerable opportunity, but may also present a challenge on the labor front.
Construction investment rebounded in 2021 as Canada’s economy recovered from the effects of the pandemic. Total year-over-year construction investment increased by approximately 11 percent in 2021, as both the residential and non-residential sectors saw gains. Investment is projected to remain at or near current high levels through 2023 before declining gradually over the remainder of the forecast period.
Last year’s rise in construction activity lifted employment to approximately 1.1 million workers, a seven percent increase over 2020, and a gain of one percent beyond pre-pandemic figures recorded in 2019. The surge in activity is expected to boost employment further, with a peak happening this year, continues the report.
Construction has rebounded well from the effects of the pandemic, thanks to a strong housing market and public-sector infrastructure investments. The challenge for the industry, however, is how to manage its labor force. Retirements are expected to reach their highest levels over the next two years. More than 150,000 workers are expected to leave the industry, with many of those being baby boomers. It represents a loss of skills and experience and these are not easily replaced by new workers entering the labor force.
Residential construction activity recorded significant increases in 2021, with housing starts increasing by 21 percent year-over-year. BuildForce Canada expects demand in most provinces to recede from this peak in 2022 or 2023.
There appears to be some evidence that Canada is not keeping up with demand for new homes, though in the face of rising interest rates, declines are expected in the rate of new-home construction throughout the forecast period. This in turn should produce corresponding declines in overall employment. By the end of the forecast period, residential-sector employment is expected to have declined by 24,900 workers in comparison to its 2021 starting point.
Non-residential demands are expected to remain strong over the forecast period, however, driven by increases in spending across the public and private sectors. The largest gains are expected over the near term, peaking in 2024. Employment by 2027 is expected to be five percent higher than 2021, an increase of 26,300 workers.
Ontario’s construction market is expected to see labor market challenges throughout the forecast period as sectoral unemployment returns to historically low levels. The pace of residential activity is expected to moderate, but a growing inventory of major infrastructure projects and a projected recovery in commercial building construction is expected to create growth across the forecast period and throughout the province’s discrete regions.
Interprovincial mobility would be one solution industry can deploy to compensate for peak periods of demand, but peak demands will be seen across the country at the same time, that option appears less viable in the short term. Employee-incurred costs when searching outside their home market creates a strong disincentive.
Developing a skilled workforce in the construction industry takes years, and often requires participation in a provincial apprenticeship program. By 2027, overall hiring requirements in the industry are expected to near 172,000 due to the retirement of approximately 13 percent of the current labor force and growth in worker demand.
Based on historical trends, Canada’s construction industry is expected to draw an estimated 143,000 first-time entrants aged 30 and younger from the local population, leaving the industry with a possible recruitment gap. When coupled with demand growth, the industry may be short as many as 29,000 workers by 2027.
The pandemic has complicated the training and certification of new workers. The latest Registered Apprentice Information Systems data shows declines in new registrations of at least 20 percent in nearly every province. Such impacts are likely to reduce the near-term numbers of new certified workers.
The report outlines how the construction industry remains focused on building a more diverse and inclusive labor force. To that end, efforts are ongoing to enhance the recruitment of individuals from groups traditionally underrepresented in the province’s construction labor force, such as women, Indigenous people, and newcomers to Canada.
In 2021, there were approximately 190,000 women employed in Canada’s construction industry, of which 27 percent worked directly in on-site construction. However, of the 1 million tradespeople employed in the industry, women made up only five percent of the on-site construction workforce.
Also underrepresented on construction sites is the Indigenous population. In 2021, approximately 63,700 Indigenous people were employed in Canada’s construction sector, or nine percent of all Indigenous people in the workforce. As the Indigenous population is the fastest growing in Canada and Indigenous workers seem predisposed to the pursuit of careers within the sector, the report suggests there may be scope to further increase the recruitment of Indigenous people into the construction workforce. The construction industry may also leverage new Canadians over the coming decade to meet anticipated labor market requirements. Canada is expected to welcome an average of more than 237,000 new international migrants each year between 2022 and 2027. This will make new Canadians a growing segment of the overall labor force. The national construction labor force is comprised of approximately 20 percent new Canadians, which is lower than the 26 percent overall share of new Canadians in the total labor force.