Canada Construction Industry Rakes in $12.1 Billion Profit

Even as other industries faltered, the Canadian construction industry pocketed $12.126 billion dollars in profit last year and made more than six per cent of all profits across the economy, the latest data says.

The industry grew in size to control almost $225 billion in assets, accounting for almost three per cent of the dollar value of all privately held assets throughout the country.

Figures from Statistics Canada released earlier this week indicate that overall profits throughout the construction industry rose from $3.215 billion in the fourth quarter of 2011 to come in at $3.789 billion in  the final quarter of 2012.

Over the whole year, even as economy wide profits ($200.9 billion) dropped 9.4 per cent, those in construction rose 8.7 per cent to go from $10.552 billion to $12.126 billion.

Construction assets, meanwhile, rose 5.4 per cent to $224.9 billion. That meant they accounted for 2.7 per cent of the total across all industries, even as liabilities hardly moved.

As a result, the industry now has $77.457 billion in net assets, up nearly $11 billion from the $66.6 billion in assets at the end of 2011.

Strong levels of construction activity, especially in apartment building, have driven the profits. At 214,827, the overall number of housing starts throughout the country, for example, was was more than 10 per cent higher than it was in either of the two years prior to that.

While housing starts – and industry profits – are expected to drop back this year before recovering in 2014, strong showings in non-residential building permits throughout most of the second half of last year suggest that non-residential work will pick up the slack to some extent.

Given the build-up in net assets, the industry is well-positioned to weather any easing of activity in the near term. Over the long term, meanwhile, the future remains bright as development of the oil sands continues to generate huge volumes of work.

By Andrew Heaton