After a decade of explosive growth, Alberta’s construction industry is poised for three years of job losses as plunging oil prices force energy companies to cancel or delay new projects.
The number of construction jobs in the oil sands could fall by 15 per cent or more, construction industry association BuildForce said in a new forecast Monday.
Most of the job losses will come in engineering employment tied to the oil and gas sector, although they will spread to residential construction as the province heads into a housing downturn. Construction hiring won’t start to rebound in Alberta until 2018 and will grow by just 6 per cent over the next decade, the association said.
The employment picture is much bleaker than initially expected. Last year, BuildForce predicted Alberta construction jobs would grow by 22 per cent over the following 10 years and the organization delayed releasing its forecast this year while it redid its projections to account for the dramatic slide in oil prices.
Alberta has led the country in construction job creation for more than a decade, with employment more than doubling since 1997 on the strength of the booming oil and gas sector. But it has already experienced steep job losses this year. Employment fell by 14,000 jobs in February, Statistics Canada said last week, the worst monthly drop since the 2009 recession.
The worst is yet to come. Construction unemployment is expected to peak next year before starting to recover toward the end of 2017, BuildForce said. It will represent the greatest fall in the province’s employment growth in more than 20 years, BuildForce said.
Even before the drop in oil prices, construction employment was set to fall slightly across the country as the frenetic pace of resource-related construction began to slow down. Nationally, jobs grew by nearly 45 per cent in the past 10 years. The industry created more than 62,000 new jobs in the past three years alone, but is expected to add just 81,000 new jobs over the next decade, or a growth rate of just 8 per cent.
“We’ve built a lot in the last decade and we were already seeing fewer major resource projects coming on stream,” BuildForce executive director Rosemary Sparks said. “The oil sands is certainly a part of that picture, but we would have seen a slightly more moderate growth rate anyway.”
Jobs will shift away from the resource sector toward infrastructure projects. British Columbia will lead the country with 22,000 new jobs in non-residential construction over the next 10 years thanks to several proposed hydroelectric and LNG facilities. Mining, pipelines and utilities projects will also help to boost construction jobs in Saskatchewan and Manitoba and “may draw large numbers of workers out of Alberta,” the organization said.
In Ontario, transportation projects, such as Toronto’s subway expansion, will help boost construction employment in Southern Ontario, but across the province construction job growth is expected to be weak over the next decade.
The housing market will also prove challenging, with low population growth dampening the need for new housing across Canada. Many of the new jobs in residential construction over the next decade will come from home renovations and repairs, not from construction of new housing, the association said.
While job growth in other provinces will help balance out higher unemployment in Alberta, the biggest risk from the oil sands downturn is if it discourages young workers from entering the skilled trades. The construction industry is set to lose 250,000 workers to retirement over the next decade, Ms. Sparks said, 36,000 of them in Alberta.
The province suffered lasting effects from the recession of the 1990s when many apprentices were laid off. Businesses later struggled to find qualified workers when the energy sector came roaring back in the 2000s.
“We lost a generation of tradespeople,” Ms. Sparks said. “That would be a more severe risk. It is challenging when we’re hearing about job losses to try and encourage people to come into the industry.”Report Typo/Error