Over the past decade, the construction industry in Quebec has been facing a decline in productivity, which has led to an unsustainable inflationary trend. This comes at a time when there is a huge demand for infrastructure, ranging from real estate to large energy projects.
A recent study conducted by the Centre for Productivity and Prosperity – Walter J. Somers Foundation (CPP) at HEC Montreal has highlighted the lack of real productivity gains in the construction industry over the last 10 years. The study, titled “Productivity of the Construction Industry in Quebec: Changes are Needed,” points out the challenges faced by the industry.
According to Jonathan Deslauriers, the executive director of CPP and one of the authors of the study, the industry is struggling with rising prices, labor shortages, and a lack of housing. The productivity of labor in construction in Quebec has stagnated since 2013, while Ontario and the rest of Canada have seen continued growth.
The study reveals that the cumulative increase in unit labor costs in residential, commercial/institutional, industrial, and engineering sectors in Quebec has been significantly higher compared to Ontario and the Canadian average. This has resulted in a rapid increase in construction costs, affecting the prices of new buildings and homes.
The authors of the study emphasize that the industry is currently experiencing an overheating phase, with unit labor costs increasing at a faster rate than in other provinces. This has had a direct impact on the final price of new constructions, with prices rising by 32% to 48% over the past five years.
The rise in construction costs has been attributed to the industry’s inability to achieve real productivity gains and contain production costs. The authors call for a thorough examination of the governance framework that regulates the industry in Quebec to address these challenges effectively.
In conclusion, the construction industry in Quebec is facing significant productivity challenges that need to be addressed urgently. The findings of the study underscore the importance of implementing strategic measures to improve productivity, contain costs, and ensure sustainable growth in the sector. By taking proactive steps to enhance productivity and efficiency, the industry can overcome the current challenges and meet the growing demand for infrastructure in the province.