Recent Decrease in Construction Spending
The construction industry has been continuously trying to recover from the negative impacts of the COVID-19 pandemic, including the initial shut down of the province which halted many jobs and projects for construction businesses. The mandatory public health measure that were put into place to limit the spread of the virus had a significant effect on the industry and put a stop to a lot of non-essential work.
As a result of the industry shut down and changes from the pandemic, construction building investment saw a major drop for both residential and commercial projects. National stats say that construction investment dropped roughly 46% in April 2020, where Ontario saw its largest decline of -$3.4 billion. Figure 1 from Statistics Canada shows the investment in building construction since 2015, where we can see the significant decline in March of 2020 when the pandemic effects began.
Figure 1: Investment in Building Construction
Road to Recovery
With the quick changes of the pandemic that left many industries feeling unprepared, they had to rapidly adjust to the new normal in order to keep workers safe and become fully functional. While it was important for construction companies to get back on job sites in order to improve the industry economically, they couldn’t ignore the new necessary protocols that will now be a permanent part of the industry.
The figure above shows that in June of 2020 the country began to see the number of construction investments slowly rising back up to normal. As the construction industry reopened and companies were able to get back to making money, the industry started to see some significant improvements. In Figure 2 from Statistics Canada we can see the increase in construction investment by province for both residential and non-residential construction. Residential construction seems to be doing well in almost all provinces, whereas many provinces are still on the decline with non-residential investment.
Figure 2: Residential and Non-Residential Construction Investment June 2020
When looking at the future of the construction industry moving forward, we hope that it will continue to move in the right direction and improve construction investment overall. Since the economy will be experiences some significant negative impacts in the coming years, it is important for industries affected by the pandemic to be proactive and prepare for the obstacles ahead.
If your construction company needs help staying on the right track when it comes to COVID-19 requirements, download Rebar’s FREE “Back to New Normal” Toolkit.