B.C.’s construction industry sees reversal of fortunes with worker shortage

B.C.'s construction industry sees reversal of fortunes with worker shortage

The British Columbia Construction Association has released a new report showing contractors are feeling the pressure as numerous factors leave them in a difficult position.

The labour pool has shrunk, interest rates have risen and construction costs have skyrocketed, the association says.

Blair Dueck, an owner of Dueck General Contracting, is among those impacted by the unusual circumstances as he tries to keep construction going on his Nanaimo apartment building.

“This project is behind schedule and over budget so we’re struggling with people to get employees or get workers on site. There’s a lot of work out there and they’re dispersed and we’re not sure where they’ve all gone,” said Dueck.

Once finished, there will be 27 rental units which the market desperately needs. But getting there has been far more of a challenge than expected.

The project, which is just off Labieux Road, is now six months behind schedule.

“It’s extremely stressful being so far behind plus the cost increases over the project,” explained Dueck.

“As we all have heard, construction costs have skyrocketed. You’ve got cost increases, you’ve got construction cost increases and interest rate increases, and no guys to do the work so it’s extremely stressful on us.”

These factors are being felt industry-wide as investment in the commercial and industrial sector is down nearly 11 percent from February 2020.

A report released Tuesday by the BC Construction Association says it’s experiencing 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 — 11 per cent since last year alone. The construction industry has wanted more trained workers for years.

“That’s really stressing our ability to keep construction moving forward in the sense that there are lots to build, lots of things that need to get built, particularly housing but these stressors with costs are really making it challenging,” said Rory Kulmala, president of the Vancouver Island Construction Association.

The BC and Vancouver Island Construction Associations say the B.C. government could help the industry by enacting prompt payment legislation that would require sub-contractors to get paid within 30 days.

“What that does is it really helps support the financial picture that a contractor has as we can appreciate. They’re carrying costs often 30, 60, or 90 days or more. That’s a pretty big burden to put on particularly small companies,” said Kulmala.

For Dueck’s project, there won’t be cash flow until the building is finished and renters have moved in. He says the costs slowly tick up with every passing day.

Kendall HansonKendall Hanson

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