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More than $171 billion in large projects could break ground in 2025
Key Takeaways:
- The value of the 100 largest projects anticipated to break ground in 2025 amounts to $171 billion.
- The three biggest verticals by dollar spend in 2025 and 2026 include manufacturing, transportation terminals, and retail.
- The Bank of Canada’s June and July 2024 decisions to lower interest rates will cascade through the economy and help more projects advance.
The Economics Group at ConstructConnect recently completed an analysis of the largest planned construction projects in Canada. While there is no guarantee that these projects will move beyond their preconstruction phases, our analysis provides a useful picture of the future demand for nonresidential construction.
The 100 largest Canadian projects still in preconstruction phases through the end of June totaled nearly $366 billion—and two-thirds of those dollars are linked to projects with expected start dates in 2025 and 2026. Of those remaining, most are expected to break ground in 2027; however, a few large public projects could begin vertical construction as far out as 2033.
For the 100 largest Canadian projects in the planning stage, over half of the anticipated spending will occur in just three vertical markets. Those top three include $58 billion for manufacturing, $47 billion in transportation terminals, and $34 billion for retail stores. These three building categories regularly include large megaprojects (projects with construction values over $1B), but this does not imply lower potential opportunities in other verticals.
Source: ConstructConnect
Looking ahead, the Bank of Canada may provide additional tailwinds for the industry. Canada’s inflation-adjusted, year-on-year GDP growth rate in the first quarter of 2024 was 0.53%. This marked the nation’s slowest growth rate in the last three years and brought the country uncomfortably close to an economic contraction. In light of this, the Bank of Canada has lowered the country’s policy interest rate by 0.25% twice since June. The new target rate of 4.5% as of July 24th should, in time, lower commercial mortgage rates, allowing more projects to achieve profitability and pave the way forward for those projects that previously came shy of meeting profitability targets.
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About ConstructConnect
Construction Starts Here™ at ConstructConnect, where our mission is to help the construction industry start every project on a solid foundation. A leading provider of software solutions for the preconstruction industry, ConstructConnect empowers commercial construction firms to streamline their workflows and maximize productivity. ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.
