Although the residential sector is expected to cool somewhat, major ongoing transportation and social infrastructure projects, along with new commercial and retail investment, are expected to help sustain healthy construction levels.
“Major new commitments to transportation and healthcare projects will help sustain healthy levels of activity as residential building cools in the GTA,” says Stephanie Bax, an associate at BTY Group. “Led by a spate of new office towers, renewed interest in commercial and retail also augurs well for 2013.”
The report notes that recovery in both the U.S. auto and housing sectors is a good sign for Ontario’s prospects as the year progresses.
Growing strength in production, employment and investment in the factory sector are also expected to drive continued modest growth.
On the residential side, the report says that the Canadian Mortgage and Housing Corporation projects that housing starts in Ontario will decline to 65,000 units in 2013 from 77,600 units in 2012.
The GTA condo market is expected to experience a disproportionate share of the decline, but the report says positive net migration levels will add strength to housing demand in the longer term.
Resurgent commercial construction and retail redevelopment will help counterbalance the residential sector’s breathing spell, the report says.
Presently, the report notes, Toronto has 16 new office towers in the works and multiple major malls being redeveloped.
The arrival of U.S. retailers Nordstrom, J. Crew and Target is also expected to further strengthen activity in the sector.
In 2013 Target is opening 24 stores across Ontario, with construction costs of $230 million.
The report says that the resurgence will support longer-term construction employment, which is expected to expand by almost 44,000 jobs — a 14-per-cent increase, with 14,000 of those jobs, or nine per cent, in residential construction, and 30,000, or 17 per cent, in nonresidential.
The report says major mining projects, such as the $1.2-billion Detour Gold Mine and Vale’s new Sudbury smelter, part of a $3.4-billion facilities upgrade, indicate strong, longer-term growth.
Meanwhile, the report says, the “Ring of Fire” holds special promise, as the area in northern Ontario is rich in minerals such as chromite and nickel — key ingredients in stainless steel, a material in high demand in China and India — and will require extensive infrastructure development for resource extraction.
The report notes that Ontario’s economy is expected to grow by two to four per cent in both 2013 and 2014, and by three to five per cent in 2015.
Following is a list of major projects compiled by BTY Group:
Major Transportation Infrastructure Projects:
- $8.2 billion Eglinton-Scarborough Crosstown LRT (Phase 1)
- $2.6 billion Spadina Subway Extension (completion 2015)
- $2.2 billion Ottawa Light Rail Transit
- $2 billion Highway 407 East extension
- $1.5 billion Windsor-Essex Parkway (completion 2014)
- $818 million Kitchener Waterloo LRT
- $640 million Union Station renovations (completion 2015)
- $600 million in funding to create 25,000 new university spaces
- $456-million Toronto Air-Rail Link
Major ICI (Industrial/Commercial/Institutional) Projects:
- $2 billion New Oakville Hospital project
- $1.75 billion Humber River Regional Hospital
- $800 million 2015 Pan American Games athletes village
- $759 million Niagara Healthcare System
- $622 million Bridgepoint Hospital
- $581 million St. Joseph’s Healthcare Hamilton West 5th Campus
- $548 million Ontario Provincial Police modernization project
- $460 million Women’s College Hospital redevelopment
- $247 million Quinte Consolidated Courthouse
- Kingston Providence Care Centre Replacement Hospital
- William Osler Health System — Phase 1 Peel Memorial Centre
- University of Ottawa Heart Institute – cardiac life support services
Major Energy/Utilities Projects:
- $7 billion in wind/solar power generation from consortium led by Samsung C&T Corp./Korea Electric Power Corp. (completion 2015)
- $2.6 billion Lower Mattagami Hydroelectric complex
- $2.3 billion for Hydro One’s new transmission and distribution lines
- $1.6 billion Niagara Tunnel project
- $26 billion nuclear replacement/refurbishment program to 2020
- $3.4 billion Vale Smelter and facilities upgrade
- $1.2 billion Detour Gold Mine