Bird flags challenges in Canadian construction

As Originally Seen in the Daily Commercial News www.dailycommercialnews.com :

Uncertain economic conditions combined with shortages of skilled labour are translating into a challenging environment for the Canadian construction industry, says Paul Charette, the current chairman of the board of directors of Bird Construction Inc.

“Looking forward to 2013, our entire industry will be challenged by uncertain economic conditions particularly in the oil and gas market in Alberta and the mining sector across Canada,” Charette told the publicly traded construction company’s 82^nd annual general meeting.

“Spending in the public sector will be constrained both federally and provincially as all levels of government continue to struggle with their growing level of debt.”

But Charette said the news “is not all bad.” Key resource projects have been ramping up in Saskatchewan and Newfoundland and Labrador, which will peak over the next few years.

Manitoba continues to post steady growth while Ontario, “just because of its sheer size, will likely continue to provide a number of bidding opportunities over the coming years.”

Charette, who retired as Bird’s chief executive officer in September 2008, told shareholders attending the meeting that if the uncertain economic climate wasn’t in itself sufficiently challenging, labour shortages continue to be an issue.

The Construction Sector Council, now BuildForce Canada, has estimated that the construction industry will need to recruit more than 250,000 new workers by 2021 to keep pace with retirements and high demand for construction services.

Charette, a former chair of the Canadian Construction Association, said competition for “an ever-shrinking pool of talent” has implications for contractors across Canada.

He said the two key drivers of Bird’s success continue to be its ability to secure large volumes of work “at acceptable margins” and to attract and retain the required number of workers to successfully complete this work.

“These two issues are extremely interdependent,” he said, noting that at least 15 other countries have identified shortages of skilled labour as their number one labour issue.

For the fiscal year that ended Dec. 31, 2012, the Toronto Stock Exchange-listed company reported net income of $58.2 million on record construction revenues of close to $1.5 billion.

Charette said 2012 was one of the best years in the company’s history.

“Having been in the industry for over 40 years, I recognize how much hard work and dedication it takes to produce the results we achieved in 2012,” Charette said.

As of March 31, 2013, the company carried forward a backlog of more than $1 billion.