The construction industries contributed, in real terms, $74.9 billion to Canada’s gross domestic product (GDP) in 2008, up 2.7% from 2007, despite a 1.1% decline in the fourth quarter of 2008.
Each of the three construction industries—residential construction, non-residential building construction, and engineering, repair and other construction activities—posted gains in 2008. The construction sector grew each year from 2003 to 2008, though its rate of growth began to decelerate in 2007.
The construction industries are a major employer. About 1.2 million Canadians worked in construction in 2008: 1,087,300 men and 144,800 women. This accounted for 7.2% of all jobs in Canada and 30.6% of those in the goods-producing sector.
Workers in many occupations are affected when the construction industries slump because not all jobs in construction require hard hats. Besides the traditional trades such as plumbing, carpentry and masonry, there are managerial, clerical and other white-collar positions.
Historically, construction has seen higher employment peaks and deeper valleys over the business cycle than other industries. During the recession of the early 1990s, jobless rates in the trades were much higher than in other occupations.
From 2001 to 2006, when Canada led the G7 nations in annual employment growth with a rate of 1.7%, construction averaged 4.5% growth. This trend held true in the 2008 economic downturn. From March 2008 to March 2009, construction employment fell 5.3%, compared with a 1.5% loss across all industries.
Construction posted the fastest employment growth from January to October 2008; then, it experienced the steepest decline as the downturn progressed. In Ontario alone, the number of workers in construction decreased 9.3% from October 2008 to May 2009.
Housing starts fell 7.3% over the course of 2008, decreasing more dramatically late in the year (down 11.0% in the fourth quarter). By the first quarter of 2009, starts in Western Canada had fallen 69.6% from their peak in the third quarter of 2007, reflecting the end of the commodity boom, while the average decline in the rest of Canada during the same period was 32.6%. Housing starts are used to estimate investment in residential construction.
The total value of building permits—for both residential and non-residential construction—declined 5.3% in 2008, the first annual retreat since 1995. The value of building permits fell more noticeably in the fourth quarter of 2008, declining 26.7% (unadjusted).