Canada Infrastructure Report Q2 2016
BMI View: The Canadian construction industry will recover in 2016 as the Liberal government spends bigon infrastructure projects in a bid to stimulate the economy. The infrastructure and non-residential sectorswill be the main drivers in growth over the next four years, offsetting declines in capital expenditure in theextractive sector and a slowdown in homebuilding.
Latest Updates And Structural Trends
We expect a recovery in the Canada construction industry in 2016, driven primarily by heightened publicinvestment in infrastructure. The Liberal government of Prime Minister Justin Trudeau plans to doublepublic spending on infrastructure over the next 10 years.
Following an estimated contraction of 1.8% for 2015, the construction industry will bounce back and post2.7% real growth in 2016 and average a heightened 3.0% annually over the four year term of the Liberalgovernment from 2016 to 2019.
Transport infrastructure - especially rail - and renewable energy will outperform over the next four years,as the liberals aim to stimulate the economy and incentivize green infrastructure.
We also expect non-residential construction to benefit from increasing investment into a recoveringmanufacturing sector, which will now benefit from a weakened Canadian dollar.
Infrastructure and non-residential will now be the major growth drivers for the construction industry overthe next four years, offsetting a continued decline in capital expenditure in the extractive sector and aslowdown in homebuilding.
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