Canada’s construction industry showed modest signs of recovery in 2024, with investment rising in both residential and non-residential building projects. New figures from BuildForce Canada and Statistics Canada indicate that despite recent economic uncertainty, the construction sector has stabilized and is positioned for long-term growth.
To illustrate this point, total investment in building construction rose 1.8 percent to $22.1 billion in January 2025, compared to the previous month. The residential sector accounted for $15.4 billion, while non-residential investment reached $6.7 billion. These figures reflect growing momentum after a turbulent few years marked by high interest rates, supply chain challenges, and labour shortages.
2024: Sector Regains Ground as Renovations and ICI Projects Lead
The construction industry’s increase in 2024 was supported by gains in residential renovations and institutional, commercial and industrial (ICI) construction. While new home building was somewhat subdued due to ongoing affordability concerns, renovation activity helped offset these declines, particularly in Ontario and British Columbia.
In the non-residential sector, investment has now grown for six consecutive months, reaching new highs in the institutional and industrial components. Public infrastructure projects in healthcare and education remain major contributors. Ontario led the way in January, recording strong investment in both multi-unit residential and industrial construction.
2025 Forecast: Holding Steady Before Expansion Returns
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According to BuildForce Canada’s latest Construction and Maintenance Looking Forward report, investment in 2025 is expected to remain relatively stable across most provinces. While residential development may not see immediate growth, easing interest rates and strong underlying demand are expected to allow the industry to recover, particularly from 2026 onward.
The report also notes that non-residential construction will likely hold steady, driven by public-sector projects and population growth. Transit and utility investments are expected to support the ICI sector (Industrial, Commercial, and Institutional) through 2027, though a temporary slowdown could occur around 2030 as current projects are completed.
Long-Term Outlook: Sector to Reach $261B by 2029
Canada’s construction industry is projected to grow steadily through 2029, with the total market expected to reach $261.3 billion. This represents an average annual growth rate of 3.2 percent, building on the 5.8 percent compound annual growth experienced from 2020 to 2024.
BuildForce projects that residential investment will climb gradually over the next decade, supported by population growth and changing housing needs. Renovation work is forecast to play an increasingly important role, even as new housing construction slows in later years.
Non-residential investment is also set to expand, particularly in infrastructure and institutional sectors. However, future growth will depend heavily on workforce availability.
For instance, research indicates that Ontario alone will need to recruit as many as 100,000 more workers in the construction industry by 2030 in order to account for current workers retiring or otherwise leaving the industry.
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