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Good morning and happy New Year! A new year is an opportunity for a fresh start. Want to stick with those New Year’s Resolutions? Research suggests those that use approach-oriented goals (achieving a positive outcome) are significantly more successful when compared to those with avoidance-oriented goals (avoiding a negative outcome).

Best of luck!

- Russell Hixson, editor

MARKETS

2023 economic predictions: 

“Canadian businesses are well positioned to weather the 2023 downturn. Our surveys show that 88 per cent were profitable in October, and 69 per cent said they were well prepared for an economic downturn or recession.” - Business Development Bank of Canada

“We deem the peak overnight rate to be 4.5% in the first quarter of 2023. Both short-term and long-term bond yields are likely to decline over 2023 as the weak economic backdrop causes increasing expectation for policy rate cuts.” - TD Bank

“Advanced economies’ fight against inflation and geopolitics will continue to be the overarching themes of 2023. Interest rate increases and Russia’s restriction of European energy supplies over the past year will further weigh on households, business investment and economic growth.” - Royal Bank of Canada

THE BIG STORY

Is homebuilding hitting a rut?

It’s been a bumpy time for homebuilding. Canada, the U.S. and beyond are seeing signs of slumps. While Canadian housing starts have been fairly flat throughout this year, U.S. starts have seen major declines month to month. Is this the economic gloom forecasted for 2023 beginning to rear its head?

What the data says:

• In the U.S., experts say it's due to labour. The Association of General Contractors reports builders passing on projects because they do not have enough people to do the work. Labor shortages are suppressing job gains in the construction industry in many parts of the country.

• Canadian labour has also had bumpy winter. According to Statistics Canada, the number of people working in Canada’s construction industry fell by 25,000 in November. Alberta and British Columbia experienced the steepest decline in construction employment, with a total decrease of 13,000 and 9,200 workers in each respective province.

• Banks are warning of a delayed reaction to interest rate hikes. The central bank is forecasting near-zero GDP growth through the first half of 2023, putting the economy on the edge of recession, and it expects unemployment to rise.

• In addition to labour shortages, countries like the U.K. are also blaming continuing shortages of key materials, like steel and timber, for gloomy outlooks.

Zooming out: 

Scott McLellan, COO of real estate developer Plaza Corp. told the Globe and Mail that most housing projects under construction today were financed two or three years ago, when interest rates were lower. Presales of homes dropped sharply over the past year, but this won’t show up in lower housing starts for a year or two.

He noted that while some projects have hit the pause button, especially purpose-built rental buildings, a major slowdown in the industry isn’t likely as demand for trades workers and building materials continues to outpace supply.

Experts with Dodge Data and Analytics agreed that a recession in early 2023 is highly likely for the U.S. but its impact on construction would be minimal for two reasons: strong banking system and a woefully undersupplied housing market.

The takeaway: Demand is king. While the struggle to find workers and materials is going to continue, demand for construction - especially housing - is high and is only going to get higher.

NEED TO KNOW

The week's headlines

⚖️ The foreign buyer ban isn’t the only major legal change hitting Canada in 2023. Federal carbon pricing is jumping from $50 per tonne to $65. In B.C. the minimum age for construction workers is now 16. Provinces are also rolling out inflation reduction measures, minimum wage increase and these new laws in 2023.

💵 A new survey shows that despite the rise of credit cards and online banking, demand for cold hard cash is still here for Canadians. In fact, the data suggests that demand for cash has actually increased and it appears that it’s being used for saving instead of spending.

📺 A massive telecommunications deal is one step closer to going through. The Competition Tribunal has dismissed the challenge to Rogers’ plans to purchase Shaw Communications for $26 billion. The Competition Bureau sought to block the deal, arguing the merger would lessen competition in the telecom market, trigger higher prices and lead to poor service.

📉 Despite a major influx of new residents from around the globe, Ontario experienced a sizeable population loss in the third quarter due to interprovincial migration. According to Statistics Canada, it appears that Alberta has been soaking up those fleeing other provinces. It seems that the Alberta is Calling campaign worked.

SPONSORED BY SITEPARTNERS

Get up to $15,000 to boost your construction business's digital transformation

Big news: The federal government is giving companies up to $15,000 in grants for digital adoption planning.

The new program has two main goals:

1. To help businesses put their offerings online (or enhance their existing online presence)

2. To help businesses enhance and digitize their operations

If you are a for-profit, privately-owned business in Canada then you could qualify.

Want help seeing if you qualify? SitePartners, a marketing agency which specializes in construction, is one of the latest companies to be recognized as a digital advisor by the federal government as part of the Canadian Digital Adoption Program (CDAP). They encourage any company interested in accessing the program to contact them.

To learn more about the grant and how SitePartners can help, read the full article.

PROJECT SPOTLIGHT

Under Armour plans sustainable Baltimore HQ

Green under the hood: Under Armour’s Global Headquarters project in Baltimore, Maryland is going for a building performance hat trick - LEED v4 Platinum Certification, net zero energy operations and the WELL Building Standard. And the team wants to do it using mass timber. Gensler’s design features geothermal heating and cooling, rainwater harvesting, a landscaped roof, solar panels, sun shades, and a premium HVAC system with energy recovery. The facility includes a stadium-like glass structure, ground-floor flagship store and a performance center for employees and visiting athletes. Work on the project began last month.

PROJECT UPDATES

Saskatchewan's Powow Arbour wins architecture award of excellence 

Water projects announced for Nova Scotia’s Canning region

Demolition begins on Edmonton’s Stony Plain Bridge

B.C. gold mine project receives draft environmental permit

Nexii completes work on Nanaimo hotel

WHAT WE'RE TALKING ABOUT

WATCH: 🗼 This is why the world’s tallest building doesn’t fall down

READ: ⛈️ PCL and Marco support Hurricane Fiona victims

TWEET: 🏜️ Can you have the winter games in the desert?

READ: 🐱 This B.C. cougar has overstayed its welcome

READ: 🔧 prairie women are reaching for the wrench in record numbers

🙏🏻 Thanks for reading!

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