PAGE A10 – February 2009 – The GTA Construction Report
Construction forecast finds 2009 will be a “challenge”
MATTHEW DESROSIERS – The GTA Construction Report Editor
Though it may not be stimulus, it is going to have
news, Wells Fargo Construc- a positive impact on a lot of
tion’s annual industry fore- contractors. But I don’t
cast confirms that 2009 will know the timing of the re-
be a challenging year for the lease of that funding. It’s
construction industry. going to be a challenging
The results for the report year for the construction in-
were found through a survey dustry.”
conducted during a six-week Wells Fargo surveyed
window in October and No- 1,175 construction execu-
vember 2008. At the time, tives across the United States
economic uncertainties and Canada, and split them
weighed heavily on every- into groups of contractors
one’s mind. However, the re- and distributors. The survey
sults are still sound, said Bill helps the company deter-
Gumminy, Canadian na- mine the Optimism Quotient
tional sales manager with the (OQ), which is a way of
company. measuring the individual’s
“I think they’re still reli- expectations for local con-
able forecasts,” he said. struction. While the seven-
“With the government com- year average is a score of 83, 2005, the OQ was at 109. an OQ below 75 indicates activity will decrease as op- In 2009, the strongest
ing out with their economic this year, the OQ is 42. In According to the report, that more executives think pose to increase. corner of the industry will be
“We’re pretty close to our commercial and non-resi-
customer base and dealers. dential construction, accord-
When you look at the 2009 ing to both surveyed groups.
construction industry fore- Road and bridge construc-
cast, it really is a reflection tion, along with residential
of the feedback we’re cur- construction, are the next
rently receiving from our more secure areas to do busi-
customer and dealer relation- ness.
ships.” “Commercial is definitely
Even though the future going to be stronger,” said
looks grim for construction, Gumminy. “Specifically
Gumminy said the cyclical with the government putting
nature of the industry will in dollars to improve the in-
bring it back around. frastructure across Canada.”
“I want to stress that we Gumminy said that,
all feel it will rebound,” he across the board, companies
said. are going to be cautious in
The survey showed 29 2009.
per cent of the contractors, “It’s just a reflection of
and 25 per cent of the dis- the construction industry,”
tributors believe the con- he said. “I think everyone’s
struction environment will going to be cautious through
improve within 12 months. the first half of 2009 until
The rest are spread out be- they see confidence levels
tween 18 and 24 months, and business activity start to
with only eight per cent of pick up.”
contractors and seven per He said it’s important for
cent of distributors believing companies to watch their
it will take 36 months to re- numbers, maintain a strong
cover. balance sheet, and maintain
There has also been a cash flow.
major trend-shift in the in- Other key findings of the
dustry, according to the re- report include but are not
port. In 2007, construction limited to:
executives were most con- Distributors believe the
cerned about the lack of a number of contractors will
quality workforce, however, decline
in 2009 that has shifted to a Materials and fuel costs
concern over lack of work. are still a concern
“That’s a reflection of a Ontario contractors are
lot of major projects being the most optimistic of any
put on hold,” Gumminy ex- region in Canada for 2009
plained. Concerns over a For more information on
quality workforce still exist. the Wells Fargo Construction
However, these are over- Industry Forecast, you can
shadowed by the worry that visit their website at
there might not be enough www.wellsfargo.com/con-
work for the workforce that struction.
already exists.
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