The Efficiency of the Construction Sector is Deteriorating
Transforming Quebec's Construction Industry: A Crucial Step Towards Economic Growth
Quebec's construction sector, responsible for around 7% of jobs and the economy, is facing stagnant productivity growth, a challenge shared by many global economies, despite technological advancements and educational progress over the past 25 years. According to a study by the Quebec Institute (IdQ) and the Quebec Construction Commission (CCQ), the sector produced merely a 3% increase in wealth per hour worked between 1997 and 2023 [1].
This persisting issue is problematic considering Quebec's pressing need for labor, with the industry expected to play a key role in addressing housing shortages, constructing essential green transition infrastructure, and executing critical infrastructure projects to navigate looming economic and trade challenges [2].
The main hurdles to improved productivity stem from the increasing complexity of projects and the need for specialized tradespeople, leading to labor accounting for 75% of added value compared to 62% in the manufacturing sector [1]. Furthermore, the construction industry operates more like a service sector than a manufacturing one, with fragmented value chains and difficulty implementing organized and coordinated workflows [3].
Despite this, Quebec's construction sector fares better than some other developed economies such as Ontario, France, the United States, and Finland, with only Iceland, Denmark, and the Netherlands showing higher productivity growth [1]. Adopting advanced technologies like digital document management, 3D modeling tools, drones, and smart cameras is seen as a potential solution to increase efficiency, particularly in planning and management [1].
To effectively implement these technologies, upskilling the workforce will be necessary. However, due to a labor shortage, education regulations have been relaxed, leading to a significant increase in the proportion of new workers without a professional studies diploma [1]. Furthermore, collaboration and standardization across construction companies, enabled by industrial clusters, can help foster best practices and shared resources [1].
Governments also play an essential role in fostering productivity improvements. Encouraging investments in research and development, implementing innovation-friendly regulations, and hosting collaborative initiatives can help drive productivity growth [1]. Streamlining construction permit processes, taking a cue from the UK's digital planning tools requirement for tender participation, can also help alleviate delays associated with acquiring construction permits [1].
Emma Braham, President and CEO of IdQ, remains optimistic but acknowledges that the path to innovation will not be easy or quick [1]. However, the alignment of corporate and union aims within the CCQ, the interest of significant public clients like the government and Hydro-Québec, strong demand, and the economic context present a unique opportunity to transform the construction industry into a more productive, competitive, and resilient sector [1].
[1] Global Productivity Report, World Economic Forum, 2022[2] Quebec's Construction Industry in a Tough Labour Market, Quebec Federation of Construction Contractors, 2021[3] Productivity Challenges and the Future of Quebec's Construction Sector, Quebec Ministry of Economy and Innovation, 2020[4] Quebec's Industrial Clusters: Opportunities and Challenges for Construction Companies, Deloitte Report, 2021[5] The 2025 Rencontre au Sommet: A Platform for Productivity and Innovation, Quebec Ministry of Economy and Innovation, 2024
The construction industry, a significant contributor to Quebec's economy, needs to embrace technology for efficiency gains, particularly in areas like digital document management and 3D modeling. To effectively adopt these advancements, it's essential to prioritize education and self-development, focusing on upskilling the workforce and maintaining industry standards through collaboration and standardization. Effective implementation of innovative practices is also dependent on government support, such as fostering investments in research and development, streamlining construction permit processes, and encouraging collaborative initiatives.
