News
October 18–24, 2011 Business in Vancouver
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Construction boom driving B.C. job gains Major infrastructure projects keeping local market buoyant, but skill shortages emerge for site supervisors, managers around the province
Vancouver Regional Construction Association president Keith Sashaw: “our members are already experiencing skill shortages for midmanagement levels” By Glen Korstrom
R
ising housing starts have combined with major construction projects to create robust job growth and make B.C.’s economy one of the hottest in North America. That economy, however, shows early signs of skill shortages, particularly for experienced managers. Canada created a higher-thanexpected 61,000 jobs in September. More than half of those openings (32,000) were in B.C. In contrast, the flagging U.S. economy created 103,000 jobs nationwide in September. Construction-related jobs from housing starts and major projects are a big part of B.C.’s success story. The number of Metro Vancouver construction jobs has rebounded to pre-recession levels. Approximately 130,000 people were employed in the Metro Vancouver construction sector in late 2008 before the global economic downturn took hold. That fell to 100,000 in January
2010, but, according to Statistics Canada, has since jumped to 136,800 in September, down marginally from 137,200 in August. “Our members are already experiencing skill shortages for midmanagement levels,” said Keith Sashaw, president of the Vancouver Regional Construction Association. “That’s site superintendants, project managers and estimators. Companies are already beginning to look further afield for those positions.” Sashaw added that international construction giants, which might have an easier time transporting workers from one location to another, have increasingly become interested in the B.C. market. Large construction companies such as North American giant
“The cost of housing is a serious challenge for recruiting individuals” – Ken Peacock, chief economist, Business Council of British Columbia
Kiewit Corp., Spain’s Acciona S.A. and Germany’s Bilfinger Berger have long operated in the B.C. market. Sashaw has recently fielded calls from representatives at companies such as U.S.-based Turner Construction Co. and France-based Bouygues S.A. inquiring about joining his 700-member organization. Major projects have fuelled construction industry employment. The region’s $3.3 billion Highway 1/Port Mann Bridge project, for example, has created about 8,000 jobs. Other large projects include
the Fraser Health’s new Jim Pattison Outpatient and Surgery Centre and the new RCMP E-division headquarters. Four recently announced office tower projects in the downtown core are among those bolstering Sashaw’s belief that skill shortages will continue for at least the next few years. So do housing start figures. Metro Vancouver housing starts rose to 1,783 in September compared with 1,644 starts in the same month last year, according to Canada Mortgage and Housing Corp. In contrast, U.S. housing starts sank to a three-month low in August (571,000) and analysts at the U.S.-based Financial Forecast Center expect those starts to continue to fall to 480,000 by November. Jobs creation in B.C. helped push the province’s unemployment rate down to 6.8% in September from 7.5% in August. That rate is high enough that widespread skill shortages are unlikely, according to the British Columbia Business Council’s (BCBC) October report People, Skills and Prosperity: The BC Labour Market in a Post-Recession Context. Still, Ken Peacock, the BCBC’s chief economist and a co-author of the report, expects skill shortages in the short term in regions such as the North Coast – Nechako and Cariboo as well as in sectors such as construction and health care. Peacock told Business in Vancouver that a major stumbling block in recruiting workers from other parts of the continent is Vancouver’s high cost of living. According to an October Royal LePage House Price Survey, average prices for detached homes in Vancouver rose to $1,022,375 – triple
Oxford Properties Group’s proposal to build a 37-storey tower on West Hastings Street is one of many construction projects helping sustain positive outlooks for Metro Vancouver’s building sector
the national average – in 2011’s third quarter. “The cost of housing is a serious challenge for recruiting individuals,” Peacock said. “Companies often look outside the province to recruit executives and other high level managers. Even at the executive level, the cost of housing is an issue for people coming here from other parts of North America, particularly the U.S.” But that high cost of living could be on the wane. According to Real Estate Board
of Greater Vancouver (REBGV) released statistics October 4, increases in property listings and fewer sales during the summer months have created a buyer’s market. Sales for detached, attached and apartment properties in Greater Vancouver (not including Delta, Surrey and Langley) rose 1.2% to 2,246 in September compared with September 2010. Listings, in contrast, spiked 20.1% to 5,680 compared with September 2010. • gkorstrom@biv.com
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