Construction

In most Canadian cities, you can see and hear the tools of the construction trade: materials piled on front lawns ready for installation, hammers and saws clamouring overhead, a dumpster in front of a building being restored, cranes looming across the skyline, and gaping excavations surrounded by plywood barriers on downtown streets. By its very nature, construction is highly noticeable. When economic conditions are right, it's ubiquitous.

	Construction in downtown Toronto Photo: Chris McCuaig

Such was the case in 2002. Municipalities issued $47.3 billion in building permits in 2002, breaking the previous annual record of $40.9 billion set just the previous year in 2001. The feverish demand across the country for new housing was the cornerstone of this exceptional year. Non-residential construction intentions, as a result of their sluggishness at the beginning of the year, were below their 2001 level. In 2002, $47.3 billion annual total was a 15.6% increase from 2001 and a seventh straight annual increase in overall construction intentions. The value of residential permits totalled $29.6 billion in 2002, up 30.8% from 2001, fuelled by strong increases for both single- and multi-family dwellings. For the first time since 1989, the 200,000-unit mark was surpassed for a single year, as municipalities authorized the construction of 205,000 new dwelling units in 2002. The value of non-residential permits retreated to $17.7 billion in 2002, down 3.1% from 2001, as record intentions for institutional construction partly offset significant declines in the industrial and commercial components. Regionally, Toronto and Vancouver led the pack in terms of annual growth (in dollars). Both were powered by vigorous construction intentions in the residential sector. Among the 28 metropolitan areas, 25 showed increases from 2001.

This success story was written by the construction and manufacturing sectors riding an economic wave of expanding markets, rising employment and growing investments. Though closely linked, the construction and manufacturing sectors still form separate parts of the Canadian economy. While the success of manufacturing depends increasingly on exports, construction is a mainly domestic activity. As such, the construction sector generally follows the flow of the home economy, and has thus made big gains over the last few years.

Despite this progress, construction remains a sector dominated by small operations. In 2002, there were about 255,000 construction firms. Of those where the number of employees could be determined, about 64% of the construction firms had 4 employees or fewer. Construction firms with 100 or more workers were rare—just under 8% of the total.

Construction workers tend to get smaller pay cheques than those working in factories. In 2002, the average weekly wage in manufacturing was $830, whereas the average for construction was $804. Just as earnings for manufacturing jobs vary greatly within the sector, wages for construction also differ from site to site. In a 1999 survey, workers on residential construction sites made $611 weekly; those in non-residential building collected a weekly wage of $794. Workers in industrial and engineering construction topped the pay scales, with $887 a week. These gaps can perhaps be attributed to the ability of larger construction firms to pay higher wages as a result of taking on larger non-residential jobs. The special skills required to operate the heavy equipment needed to complete these big projects may also help to account for the difference.