Business Monitor has downgraded its 2013 outlook for the construction industry, despite its stable performance.
The Canada Infrastructure Report indicates that below-trend construction industry data has caused the Business Monitor to adjust its 2013 forecast for industry growth. The revised outlook for the industry is 2.2 per cent.
Though Business Monitor is downgrading its forecast, it indicates that Canada will be one of the best performing developed markets over the near term.
High-value infrastructure projects across the transport and energy sectors are driving growth in the industry. The decline in the housing sector, paired with falling prices in the commodity sector and slowing demand, has forced developers to stall new capital investment. Though social infrastructure, industrial projects and the housing market are slowing, they should remain positive.
There has been a slight pickup in the infrastructure industry in the second half of the year. As a result, the report predicts that the sub-sector will continue to show positive growth.
Business Monitor notes the growing detrimental impact of the regulatory environment on natural resource-related infrastructure. It believes the rejection of the $5.5 billion Northern Gateway project will set poor precedent for other projects.
Business Monitor’s 10-year forecast period to 2022 shows that railways will be one of the strongest sub-sectors. Urban rail projects including Toronto’s Spadina Subway expansion project, Ottawa’s Light Rail project and Edmonton’s Light Rail project are driving this prediction.
