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Serious job losses predicted for Alberta construction

Serious job losses predicted for Alberta construction

Alberta could be in for heavy job losses in the coming years as the construction industry adjusts to low oil prices. Overall, the oil price decline is driving employment lower across all construction sectors. The latest BuildForce report estimates total construction employment will fall by 13,000 jobs in 2015 and then by another 18,000 until the cycle reaches a bottom in 2019.

A steady recovery from 2020 to 2025 more than restores the lost jobs as overall employment rises 1,700 jobs above current levels by 2025. The cycle marks an end to a 25-year expansion.

At the bottom in 2019, overall job losses are limited to 15 per cent of peak employment in 2014.

Impacts on the local construction workforce include the loss of thousands of interprovincial workers.

According to BuildForce, though the evidence is incomplete, a large proportion of this group is leaving Alberta and returning to their province of residence. These shifts are not limited to resource-related jobs. Most construction labour markets are affected by the departure of the fly-in, fly-out workforce and this is a rapid and short-term adjustment.

According to the report, much of the adjustment is through the exit of interprovincial workers, leaving a relatively small increase in local unemployment. The adjustment process and the shifting mix of workers, both remaining and departed, create potential labour market challenges — not only in Alberta, but also in the provinces as skilled workers return. Industry must also address an aging workforce and the need to replace workers expected to retire over the next decade. The decline is expected to be felt especially hard in the oilsands.

The report predicts the oil price decline will drive investment in new oilsands projects down by 66 percent from the start of the cycle in 2015 to 2019. This loss is the leading edge of the down cycle in Alberta construction.

The report explains that declining investment and employment for new projects only describes part of the changing market dynamics.

Over the last several years, there has been a significant expansion of existing oilsands capacity that leaves a growing commitment to sustaining investment and maintenance. This work requires a similar group of skilled construction labour as new construction.

Requirements for this work continue to rise across the scenario period — and this helps to offset some of the job losses in new projects. Overall, labour requirements for work on the oilsands decline by 27 per cent from the peak in 2014 to the bottom of the cycle in 2020.

Job losses in other non-residential work and new housing are proportional and follow a similar pattern.


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