The Full Potential of the Construction Industry

Construction
By Marketing team
June 22, 2021Articles

Our in-house expert looks at how the pandemic has impacted Quebec's construction industry.

Before the pandemic hit, the construction industry employed more than 267,000 people and generated total investments of 56.3 billion1 (2019), positioning itself as one of Quebec's leading business sectors. Construction Account Manager, Josée-Claude Dufour, provides a current look at the industry and highlights Hitachi Capital Canada’s added value for construction contractors.

Hitachi Capital Canada and its Value-added Solutions

Hitachi Capital Canada’s construction specialists have the knowledge and expertise to support construction contractors through the decision-making process. Over time, they’ve built long-term relationships with the industry’s key players and built bridges between their various business partners.

“We’ve been in this business for a long time, so we’re well versed in the value of equipment and in the specifics of the industry,” says Josée-Claude. “The number one goal of specialized account managers is to walk our clients through selecting a financial solution and to advise them on their equipment purchases to help them reach their full potential in today's industry and reduce their operating costs.”

A Look Back at the Pandemic Year

Back in March 2020, when the Quebec government declared a complete shutdown to everything but emergency calls and safety-related work, the construction industry was no exception to the rule. When compared to figures from 2019, the number of construction hours worked in April 2020 dropped by 84.2%2 and the number of employees by 67.2%.3

“Construction workers provide countless essential services,” explains Josée-Claude Dufour. "Beyond their work on job sites, they also take care of everything associated with infrastructure maintenance, sewer cleaning, and snow removal on roads and sidewalks. We can't afford to halt these services for too long.”

Consequently, the construction industry was one of the first to resume its operations, with residential construction sites reopening first in April 2020, followed by commercial and manufacturing construction in May. By August, the 2019 employment rate was back up again.4

According to a report published by the Commission de la Construction du Québec in November 2020, 78 construction sites valued at $5 million and up were operating in Greater Montréal during this period, totalling $33.5 billion in investments.5  These included the Réseau Express Métropolitain transit project and the reconstruction of the Turcot Interchange. Altogether, construction industry workers logged more than 162 million hours in 2020, whereas the total for 2019 was 177 million.6

To promote economic recovery, Quebec announced that it would step up public investments to neutralize the anticipated decline of private investor capital. In the 2020-2030 Québec Infrastructure Plan, the provincial government unveiled an unprecedented investment set at $130.5 billion.7

New Needs, New Trends

Much like what happened with the real estate sector, the residential sector is currently experiencing an impressive boom. “With confinement and the ever-growing trend of telework, Quebecers want to feel comfortable at home,” said Josée-Claude. “People are going to want to make leasehold improvements, and either renovate their homes or redesign their landscaping, creating attractive business opportunities.”

Moreover, low and relatively stable interest rates encourage entrepreneurs to buy equipment and get started on their building or home renovation projects. The number of construction starts in April peaked in 2021, with 5,730 homes on the books—that’s a 38% increase over those recorded in 2019.8

As for what this means for commercial construction, the widespread shift to remote work or a hybrid work model implies a new set of requirements for corporate office space. It’s quite likely that big office towers will be replaced by smaller work spaces, with layouts designed for more flexibility.

Construction Equipment

With temporary production-plant closures due to COVID-19, new equipment suppliers have fewer units in stock, which has driven buyers to the used-equipment market. Both the burgeoning demand and an increase in the price of steel since the start of the pandemic9 has led to a rise in equipment prices.

“Whether the buyer opts to purchase used or new equipment ultimately hinges on what they plan to use it for,” says Josée-Claude. “In the case of used equipment, they need to look into its general maintenance history and ask about tire, brake, and track wear and tear, and about rust or leaks.”

Financial alternatives, like equipment refinancing, exist to provide used-equipment owners with ready access to working capital to be able to respond to time-sensitive business opportunities. By going this route, they get quick access to liquid cash through their equipment inventory without having to scrap it.

 

 

Josée-Claude Dufour

Since joining the company five years ago, Josée-Claude has helped build the sustainable business relations network between Hitachi Capital Canada and its construction partners. Josée-Claude works on the front lines and prioritizes her client's needs. Her valuable industry expertise has made her a reputable leader in the field.

 

 

Bibliography

1 Government of Quebec. (2021). Plan d’action pour le secteur de la construction. https://www.tresor.gouv.qc.ca/fileadmin/PDF/infrastructures_publiques/Plan_d_action_construction.pdf?fbclid=IwAR2vPp8mrQDVPW_O2eEUcu0-N-n_eqvt9vsNuAIjkYxH_6hoOe1zo8gqkR0

2Commission de la construction du Québec. (2021, april). Nombre d'heures travaillées dans la construction selon le mois. https://www.ccq.org/-/media/Project/Ccq/Ccq-Website/PDF/Recherche/StatistiquesHistoriques/2020/C36.pdf?la=fr-CA&rev=86e21e45be314fc2bf42848421b0c8a4&hash=1F93A7DF19164DD7569FDCA1A11A1B2B

3Commission de la construction du Québec. (2021, april). Nombre de salariés dans la construction selon le mois, 2011-2020. https://www.ccq.org/-/media/Project/Ccq/Ccq-Website/PDF/Recherche/StatistiquesHistoriques/2020/C35.pdf?la=fr-CA&rev=5a2ea92be637439d8bd31acfd2d550c6&hash=CD6D9DDB434062556F6D92E6D90D2A5D

4Government of Canada. (2021, may). Les répercussions économiques de la COVID-19 au Québec : Construction. https://www.guichetemplois.gc.ca/content_pieces-eng.do?cid=16911

5Commission de la construction du Québec. (2020, november). Liste des chantiers importants – Novembre 2020. https://www.ccq.org/-/media/Project/Ccq/Ccq-Website/PDF/Recherche/ChantiersImportants/Novembre2020/2020_11_Mtl.pdf?la=fr-CA&rev=f03ed90df0764a9eaa7563545bc8a120

6Commission de la construction du Québec. (2021, april). Nombre d'heures travaillées dans la construction selon le mois. https://www.ccq.org/-/media/Project/Ccq/Ccq-Website/PDF/Recherche/StatistiquesHistoriques/2020/C36.pdf?la=fr-CA&rev=86e21e45be314fc2bf42848421b0c8a4&hash=1F93A7DF19164DD7569FDCA1A11A1B2B

7Government of Quebec. (2020). Plan québécois des infrastructures. https://www.tresor.gouv.qc.ca/fileadmin/PDF/budget_depenses/20-21/7-Plan_quebecois_des_infrastructures.pdf?fbclid=IwAR0H89eqIe-anRq2L8H-45El2jrUEaphjqAWJOXSrBCROECsEq7VEF_MZrY4

8APCHQ. (2021, april). Avril, un autre mois record pour la construction. https://www.apchq.com/documentation/economique/mises-en-chantier/avril-2021

9Statistics Canada (2020, october). Industrial product and raw materials prices indexes. https://www150.statcan.gc.ca/n1/daily-quotidien/201130/dq201130b-eng.htm