March 11, 2013

Architectural Services Jobs in Canada have Consistently Outpaced the U.S.

Chief Economist, CanaData

The architectural and construction industries co-exist in a bound-at-the-hip relationship. Design work precedes on-site activity levels.

Therefore, Statistics Canada’s recently published service bulletin entitled Architectural Services (Catalogue no. 63-245-X) provides interesting reading.

The document combines financial results for both architectural firms involved in building construction and landscape architects, although the former is by far the larger of the two.

From a combined revenue of $3.5 billion in 2011, 90.5% was credited to “building” architectural services ($30.5 billion), with the remaining 9.5% going to landscape architectural companies.

The statistics in this Economy at a Glance will concentrate on “building” architectural services as opposed to the landscaping component.

Firms in only four provinces – Ontario, Quebec, Alberta and B.C. – accounted for 90% of total architectural revenues nationally in 2011. Ontario was the clear leader with 40% of the total. That was slightly more than the province’s share (38.7%) of the nation’s total population. Ontario, led by its pace-setting city of Toronto, is top-heavy in head offices and all manner of commercial and industrial concerns.

Quebec firms at 20.6% were in second place for architectural revenue. Third and fourth place Alberta and B.C. were almost tied at 14.4% and 15.8% respectively.

Quebec’s share of the national population total is 23.1%. Alberta’s population share (11.2%) remains below that of B.C. (13.3%), but the population centres of Calgary and Edmonton have been benefiting from the ongoing energy boom in the Oil Sands.

Almost all architectural revenue in 2011 (97.3%) came from clients in Canada. Only 2.7% was earned from customers outside the country.

Slightly over 50% of revenue was derived from businesses, with another 8% flowing from individuals and households. That left nearly 40% to be derived from governments and public institutions.

The high proportion coming from government was perhaps surprising. There’ll be more on that in a moment. First, let’s examine the subject of most interest to our industry, construction.

Residential building projects accounted for 22.8% of the total, with the single-family market at 7.8% and multiples at 14.9%. Strictly within the residential category, revenue from multiples (65.6%) was nearly double the share from singles (34.4%).

More than three-quarters (77.2%) of total revenue came from non-residential building projects.

The three leading sub-categories within non-residential building were health care projects (15.4% of the grand total); educational (14.8%); and offices (13.9%).

The proportions for those three categories strictly within non-residential building were as follows: health care, 20.0%; educational, 19.2%; and offices, 18.1%.

In other words, the proportions of those three categories within non-residential building were close to one-fifth each.

Again, this highlights the high proportion of architectural work that is public-initiated, especially given that many office projects are government sponsored as well.

Other leading sub-categories were “retail and restaurants”, 9.5% of the grand total and 12.3% of the non-residential building total; and “entertainment, recreational and cultural”, 8.7% of the grand total and 11.3% of the non-residential building total.

Hotels and convention centres were 2.1% of the grand total and 2.7% of the non-residential building total.

Industrial buildings were 4.7% of the grand total and 6.1% of the non-residential building total.  

Included with this article is a graph comparing employment in the architectural and engineering services professions in Canada versus the United States.

What’s most readily apparent from the chart is how much more severely the industry was impacted south of the border than in Canada during the recession.

Furthermore, the long-term trend has obviously been in Canada’s favour. In 2000, there were approximately ten Americans in the industry to every Canadian. That’s the same ratio usually adopted to compare the total populations between the two countries (314 million people in the U.S. versus 35 million in Canada).

Now, the relationship has altered dramatically. Near the end of last year, there were only six Americans working in the industry to each Canadian.

As for year-over-year percentage changes in employment, Canada has matched or exceeded the U.S. in every month since early 2006, with the gap sometimes being quite substantial – nearly as high as plus ten percentage points.

In the most recent month, the year-over-year gain in Canadian architectural and engineering services jobs was +8.1%. The comparable figure in the U.S. was +2.3%.

For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog.

Architectural and Engineering Services Employment – Canada vs. U.S.
(three-month moving average, placed in latest month)

Architectural and Engineering Services Employment – Canada vs. U.S.

Data source (not seasonally adjusted): Statistics Canada.
Chart: Reed Construction Data - CanaData.
Architectural and Engineering Services Employment – Canada vs. U.S.
(based on three-month moving averages, placed in latest month)

Architectural and Engineering Services Employment – Canada vs. U.S.

Data source (not seasonally adjusted): Statistics Canada.
Chart: Reed Construction Data - CanaData.

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