Never in the history of Canada’s construction industry has it been faced with the pressure to change the way it builds.
That’s a good thing, and here is why.
Construction has lagged all other industries in productivity and has had an awful track record when it comes to innovation. McKinsey’s 2017 report “Reinventing Construction: A route to higher productivity” highlighted the lagging labour productivity growth in construction relative to other industries over the past two decades. A meagre 1% a year compared with growth of 3.6% for manufacturing.
According to BuildForce Canada, construction in Canada will continue to grapple with an aging construction labour force and the need to replace almost 260,000 (or 22%) of those workers expected to retire in the next decade. If we consider the growth and demand for construction, the building industry will have to recruit, train, and retain just over 309,000 new workers by 2030.
The industry will be challenged to meet the growth required as the traditional skilled labour force supply will continue to be in high demand. This will continue to exacerbate the shortage of the workforce, leading to an increase in turnover and wages and contributing to rising inflation in construction. The problem is unlikely to be solved by our current immigration policy despite government’s best efforts. Delays in permanent residency or red tape in processing applications both contribute to lack of retention in construction among immigrants.
Compounding the pressure on the construction industry is the current housing crisis. Canada has been falling behind in building its housing stock over the past decade. According to a 2021 Housing Report published by Scotiabank, Canada has the lowest number of housing units per 1,000 residents of any G7 country. An extra 100,000 units would have been required to keep the ratio of housing units to population stable since 2016 — leaving us still well below the G7 average. Add the government’s continued immigration growth targets of nearly 450,000 new immigrants per year, and the country is going to keep falling behind in providing the necessary housing stock required. Currently, an average of 200,000 homes are built every year in Canada. However, in 2022 the federal government committed to doubling the average number of homes built to almost 400,000 per year by 2031. Bottom line, the construction sector does not have the capacity to build the number of homes required.
Dovetailing these demands on housing is government’s commitment to sustainability and decreasing GHG emissions. Buildings contribute almost 40% of greenhouse gas emissions worldwide. This is comprised of both the materials utilized during the construction process (the embodied carbon) as well as the ongoing operation during its lifespan (operational carbon). Through changes in building codes, the industry is being forced to transform the way it approaches construction. New means and methods, new green energy standards all contribute to construction companies and consultants needing to be more sophisticated and more oversight to detailing and design. Just one more hole in the construction dike that needs to be plugged.
If we are going to solve these aforementioned structural issues, we need to think differently about how we build. The future sustainability of construction is a big topic, but let me give you my thoughts on how we can begin to solve these problems.
Increasing productivity in construction means thinking differently about how we build. We are not going to solve our productivity issue by trying to add more labour. The automotive industry figured this out long ago. You would never conceive of having someone show up in your driveway with a bunch of parts and start assembling your car. So why do we think that building that way for one of our most expensive assets is the best way to go? We need to begin looking at the way we build our buildings from a manufacturing mindset.
By moving many of the above ground elements of construction into a manufacturing or “offsite” environment does several things. It forces design to be locked down prior to manufacturing — no more figuring out the details while in the field. The work in a controlled environment now becomes task driven, which can be trained. No longer is there a reliance on only utilizing “construction workers”, it opens the door to other types of labour skillsets from other industries.
The lack of sustainability of the traditional construction workforce is often not given the attention it deserves. In the past, the traditional construction worker has required strength and perseverance to perform the work, which by default has only attracted males to the industry. The physical demands has resulted in one of the highest injury claim rates by industry at an average of 4 out of every 100 workers being injured. Almost 60% of all construction claims come from overexertion, “struck by” incidents, and falls from elevation (Worksafe BC). Often, injured workers then turn to drug and alcohol to ease the pain from the effects of the job. This linkage can be seen today as almost 20% of people who die from the toxic opioid crisis are male construction workers.
By moving the work offsite and breaking down the work into tasks, there is an opportunity to solve many of the aforementioned issues. A manufacturing environment can embrace greater diversity, reduce the number of workers required to build the building and ultimately relieve the labour pressure off the traditional construction industry. Add in automation of some of the more labour intensive tasks and the manufacturing worker can go home every night without the physical effects that linger as a result of the demands of traditional construction.
By embracing offsite construction, it allows a shift to occur in the culture of construction — one that is often seen as dirty and male oriented, to one of high technology and cultural diversity. The move to industrialization will shift the way we think about construction and put it on par with the likes of the aerospace and automotive industries. This will lead to the attraction of a new labour force — one that embraces technology and adopts digitization which will reduce costs and enhance project execution.
However, we should not be fooled. There is still a portion of the work that has to be carried out on site in the elements. Though, by taking a DfMA (Design for Manufacture and Assembly) mindset, the demands of the site team are lessened. Fewer workers are required on site to assemble the offsite components. This leads to less reliance on skilled trades, better control over quality due to better supervision, less weather-related delays, greater certainty over schedule, and less neighbourhood impact. All of which leads to greater cost certainty for owners.
This new shift in mindset of how to construct is not easy to overcome. It starts with determined leadership and a commitment of collaboration from both the private sector and all levels of government to embrace new methods of construction.
So, the next time you are undertaking a project, begin to challenge the status quo and think, “Is this the best way to build my project?”.
