David Smith can't stop smiling.
That's because the executive vice-president of the Calgary Construction Assoc. (CCA), like the rest of its members, is preparing for a 2005 bristling with multimillion-dollar projects that are sure to break last year's record of $2.68 billion.
"What (general contractors) did in 2004 was phenomenal, and we're expecting even greater things for 2005," Smith said following his presentation to the Canadian Institute's Construction Superconference in Calgary last week.
"They are projecting a 30-per-cent increase in volume (of commercial, institutional and residential projects) over the 2004 total, and with that they believe they'll easily surpass the $3-billion mark in the city of Calgary."
The same rings true for the construction community in Edmonton, which is also looking forward to another big year.
"In our plan room today we had 50 construction projects on view for members," Gordon MacPherson, executive vice-president of the Edmonton Construction Assoc. (ECA), said in a telephone interview. "That includes commercial, institutional, infrastructure, etc., and that's in comparison with Calgary, which has 20."
The ECA hasn't come up with a 2005 forecast, but MacPherson anticipates another banner year. He said he expects the number of large projects to be tendered this year will surpass the more than 1,000 realized in 2004.
"We've had consecutive years where Alberta, and in particular Edmonton, has been leading or close to leading the country in growth, and I don't see that changing."
Nor does the CCA's Smith foresee a slowdown in the years to come. Buoyed by rabid oil and gas activity - especially the nearly $70 billion of oilsands projects either under- way or being planned - Smith anticipates steady growth in Alberta's construction sector.
"(The oilsands) will just have a great affect on the city of Calgary and the city of Edmonton, and actually all the centres throughout the province. So schools and hospitals will have to be built, and I see that transpiring over the next few years; it's all very positive."
It's a far cry from a decade ago when the city's construction industry hit the skids.
In 1994, unemployment among Calgary's construction tradespeople had reached 18 per cent, while the number of person-hours worked was just three million.
Things began to turn around in 1995-96, thanks in part to a federal infrastructure program that earmarked $160 million for projects in Calgary. By 2000 the number of person-hours worked soared to an average of two million per month.
In his speech, Smith pointed to various residential projects - including major downtown condo highrises - under way, two downtown office towers in the works, numerous suburban office complexes, and several hundred thousand square feet of warehouse and distribution space in east Calgary.
"Warehousing has gone crazy because we are becoming a major distribution centre," Smith said. "Also, the Calgary airport is the fourth-busiest airport in Canada. In the past 10 years we've spent $750 million in upgrades and building new facilities at the airport."
Retail development is also bustling - retailers did around $39 billion worth of business last year and that has spurred new construction, he said.
But perhaps the motherlode is the Alberta government's spending on health, education and infrastructure projects. Smith said that the province has budgeted $12.5 billion for construction in the next five years, with $6 billion of that happening within the next three years.
All three Calgary hospitals will add a total of 340 new beds and 20 operating rooms, while ground will be broken on a new 350-400 bed facility in Calgary's southeast in 2006. In all, the Calgary Health Region (CHR) will spend roughly $2 billion in the next five years.
In Edmonton, the Anthony Henday Drive extension - budgeted to cost almost $500 million for its construction by 2007 and maintenance over the next 30 years - is one of the biggest projects on the books in that city. Other major ventures include the $110-million Royal Alexandra Hospital North Treatment Centre; about $400 million in ongoing projects at the Alberta Heart Institute; and several multimillion-dollar projects at the University of Alberta, the ECA said.
But with the tidal wave of construction washing across Alberta and other parts of Canada comes problems, namely higher construction costs caused by labour shortages and increased steel prices.
Both associations say they are concerned about the dearth of qualified tradespeople and are taking steps to remedy the problems.
"We're constantly on the lookout for better ways to recruit people to the industry, not necessarily young or not necessarily gender specific," MacPherson said.
The ECA works with high schools and post-secondary institutions, which includes a program where Northern Alberta Institute of Technology students visit the association's facilities in an effort to encourage them to continue with their apprentice programs.
In Calgary, the CCA has a youth employment program for kids who drop out of high school that includes an interview process, safety training and mentoring. Smith said organizations such as the CHR remain concerned that the labour shortage and other challenges may lead to project delays and cost overruns. But he said he is confident that the contractors will come through in the end.
"The industry is very dynamic; they're guys from the school of hard knocks, kind of like the early settlers, so I think they will make it happen, although it won't come easy."
(John Ludwick can be reached at ludwick@businessedge.ca
