by arslan_ahmed | November 2, 2022 1:26 pm
British Columbia’s construction industry is entering into dire straits, according to statistics reported in the Fall 2022 BC Construction Association (BCCA) Industry Stat Pack, further supported by findings from a recently published economic and policy report by the organization.
Investment in BC’s industrial, commercial, and institutional (ICI) construction sectors is down 10.9 per cent since Feb. 2020, while the non-residential building price index spiked 19.6 per cent. Construction has seen a whopping 80 per cent increase in the value of current projects compared to five years ago. Contractors are struggling to balance declining commercial demand with rising costs of materials and labour, as waning procurement standards on public sector projects add to project risk.
B.C. is living its lowest construction unemployment rate since 1976 at 5.7 per cent, with the competition for talent sending average construction wages soaring 26 per cent since 2017 and 11 per cent since last year alone. This 2022 jump includes a two per cent increase due to the 5 days mandatory paid sick leave legislated this past January.
Rising prices led to the largest industry in B.C.’s goods sector to grow 10 per cent in dollar value, despite the decrease in demand. Overall, the construction sector contributed 9.7 per cent to provincial GDP.
Making a challenging situation worse, the provincial government has failed to deliver on prompt payment legislation. Without it, the province’s contractors will experience significant financial risk, taking on increased cost of debt, and in danger of bankruptcy as they wait 90-120 days to be paid.
“Waiting to be paid is getting even more expensive” says Chris Atchison, BCCA President. “Slow payment for services rendered is unique to our industry, and with costs of goods, labour, and borrowing all rising, many B.C. contractors are reaching crisis. Prompt payment legislation is not experimental, it is proven. Unlocking cash flow is an economic necessity and in the best interests of every community in B.C.”
The British Columbia Construction Association (BCCA) works with four regional construction associations (NRCA, SICA, VICA and VRCA) to serve more than 10,000 employers in the province’s industrial, commercial, institutional (ICI) construction industry. BCCA advocates on behalf of all employers to ensure British Columbia’s construction sector remains productive and resilient.
Source URL: https://www.constructioncanada.net/bc-contractors-crisis-with-rising-costs-lack-of-labour-and-govt-action/
Copyright ©2023 Construction Canada unless otherwise noted.