Alberta's red-hot construction market is showing no signs of slowing down.
Despite a dire need for more manpower, the forecast is calling for an overheated building sector to remain running on all cylinders for the next 10 years.
According to the Alberta Construction Association (ACA), $39 billion worth of work - excluding the residential sector - is being projected for 2007.
Of that, $34 billion is slated for energy-oriented construction, with a little more than $5 billion dedicated to industrial, institutional and commercial projects.
"We're estimating that's a 4.9- per-cent increase in real terms" over 2006, says ACA executive director Ken Gibson.
But finding the labour to fuel that construction remains a concern to many in the industry.
"What will stop all this growth is the lack of people," says Paul Verhesen, president of Edmonton-based Clark Builders, a mid-sized construction company that also has offices in Calgary and Yellowknife.
Last year was a record year for Clark, which has been averaging year over year growth of between 15 per cent and 20 per cent.
To deal with this growth and escalating industry costs, Verhesen says the company has expanded its base to source materials and people. With costs so high in Alberta, it is looking to other parts of Canada and around the globe to find what it requires at more reasonable prices.
"The industry is pretty much at capacity now," says Verhesen. "There are some folks from other parts of the world coming in to fill up the gaps but the determining factor on growth is going to be people.
"You either have to work smarter or harder, or both, to get the projects built."
Working smarter is part of the theme behind a set of three concurrent Edmonton trade events making their debut this month on May 8-9 at the Shaw Conference Centre.
Buildex Edmonton, Construct Edmonton and Design Trends Edmonton will showcase the latest technologies, products and services in the real estate, construction, design and property management industries, says Mark Stephenson, vice-president of the western region for Merchandise Mart Properties Canada Inc. (MMPI), the company behind the overall event. MMPI holds similar shows in Calgary and Vancouver.
"With the boom going on in Edmonton right now, the timing is perfect and that is illustrated by the tradeshow being virtually sold out," says Stephenson.
There have been a number of smaller construction conferences in Edmonton, but not on the same scale as this new offering, says Don Onyschuk, president of the Edmonton Construction Association.
"Things are good," he says. "A number of years ago we were worried if we were going to get enough work to keep the lights on.
"Today, we don't have to worry about getting the work - it's about how much do we want to do and how much can we handle.
"The word around the industry is that contractors and suppliers are only going to service their good customers and when it comes to going beyond those boundaries - to do business with these other customers - it's going to cost more money," he adds.
Developers, meanwhile, can expect to see some projects shelved or delayed as officials say that most companies have already used up whatever excess capacity they may have had.
All this is being fuelled by the massive growth of the province's oilsands sector in northern Alberta, which in turn is creating growth demands in other parts of the economy as more and more people choose Alberta as their place to live or work.
Industry experts say new oilsands development, combined with other energy-related projects such as pipeline projects and expansion of electricity operations, means there's a potential for $150 billion worth of construction work over the next decade.
On top of that, the provincial government just put forward a three-year capital plan for 2007-2010, pegged at $18.2 billion to build health and education facilities, roads and upgrade municipal infrastructure.
The plan, part of the government's late-April budget, represents an increase of $4.9 billion or 37 per cent above that of the previous 2006-2009 capital plan.
Much of the construction activity will be centred on the Wood Buffalo region, home to the oilsands. But the ACA's Gibson notes that construction work continues to be active in all parts of the province. Oil and gas is spurring growth in Grande Prairie, petrochemicals are driving work in Red Deer and new office towers are on the books for Calgary.
Edmonton, with a number of oilsands upgraders slated for its greater metropolitan region, is right behind Wood Buffalo when it comes to construction work.
"It's almost too much good news," says Duncan Binder, president of Edmonton-based Binder Construction Ltd., a general contractor that builds institutional projects.
Binder adds that Edmonton's Capital Health Authority has its own $1-billion construction program, which just started last year. "The industry, I would say, is overheated and for the foreseeable future we don't predict any slowdown."
Binder says his company has taken on more work - but only up to a point. "At the end of the day, you still have to complete the project and you still want a happy client. We're handling projects that we can complete in a reasonable fashion," says Binder, who has hired sparingly and instead used his company's excess capacity to take on more business.
He's been through a boom-to-bust cycle before and has seen some firms go from being a smaller player to competing with larger competitors. "Some of those (smaller) firms tend to fall back to their roots."
Clark's Verhesen says it's not uncommon now for companies to bypass projects they would have considered in other times.
"We have our stable of clients that we built for in the past and clients we have long histories with - we build their projects. If there are new projects that are materializing with owners we do not know and it doesn't fit in our current capacity, we'll have to pass on it," says Verhesen.
On the labour side of the equation, the ACA says construction employment is just above the 181,000-person level as of March 2007, up from 164,000 workers in March 2006.
While there is a focus on training more tradespeople and increasing the number of Aboriginals and women in the construction workforce, foreign workers remain the likely target for additional hires.
"Every trade that's out there on the jobsite is shorthanded," adds Onyschuk. "Expansion is good, a lot of companies would like to expand their companies and their business. But right now, expansion would be tough to do because you're drawing people from a workforce that is depleted. If you're bringing in someone, you're lowering your standards (by) hiring people with less skills and less experience."
Officials say there is no magic bullet that will resolve the issues faced by the construction sector.
"You can't stop everything on a dime," says Gibson, adding there are construction needs that must, and will, be met. "There are 100,000 new residents in the province. They did not bring their schools with them (and) they didn't bring their roads with them."
(Laura Severs can be reached at laura@businessedge.ca)
