{"id":20314,"date":"2022-07-25T11:11:00","date_gmt":"2022-07-25T18:11:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=20314"},"modified":"2022-07-22T10:12:09","modified_gmt":"2022-07-22T17:12:09","slug":"construction-is-facing-skills-shortages-prompt-payment-project-procurement-challenges","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/07\/construction-is-facing-skills-shortages-prompt-payment-project-procurement-challenges\/","title":{"rendered":"Construction is Facing Skills Shortages, Prompt Payment &#038; Project Procurement Challenges"},"content":{"rendered":"<p style=\"text-align: justify;\">Findings from the recently released BC Construction Association (BCC A) industry survey show a thriving construction industry that is a major contributor to the province\u2019s prosperity.<\/p>\n<p style=\"text-align: justify;\">For example, the value of current projects has surpassed pre-pandemic figures and grown to $134 billion.<\/p>\n<p style=\"text-align: justify;\">The construction industry\u2019s contribution to the province\u2019s gross domestic product has increased to $23 billion today from $18.8 billion in 2017.<\/p>\n<p style=\"text-align: justify;\">Construction is the biggest employer in BC\u2019s goods-producing sector, with more than 200,000 British Columbians relying on the industry for a paycheque. Average annual construction wages have risen to more than $66,000.<\/p>\n<p>The industry is also maturing.<\/p>\n<p style=\"text-align: justify;\">The number of companies that have adopted diversity policies, such as the Builders Code, has risen to more than eight out of 10.<\/p>\n<p style=\"text-align: justify;\">Women now make up almost 6% of the skilled construction workforce, and they are five-and-one-half times more likely than men to recommend the trades as a career path.<\/p>\n<p style=\"text-align: justify;\">\u201cWomen in construction are following a passion,\u201d said BCC A president Chris Atchison. \u201cThey\u2019re determined and persistent and will work to overcome any barriers that get in their way.\u201d<\/p>\n<p>Construction is also facing some serious challenges, such as a skilled labour shortage.<\/p>\n<p style=\"text-align: justify;\">Although the number of construction companies in BC has grown to more than 26,000, the number of people employed in the industry has fallen.<\/p>\n<p style=\"text-align: justify;\">Approximately nine out of 10 construction companies employ fewer than 20 workers, and the average company now employs just over 6.5 people.<\/p>\n<p style=\"text-align: justify;\">\u201cThe decrease in size is a reflection of market forces,\u201d said Atchison. \u201cThe skills shortage makes it hard to find and retain talent, so employers are forced to do more with less.\u201d<\/p>\n<p style=\"text-align: justify;\">In addition, profit margins have shrunk, so there\u2019s less cash flow to invest in technology and training.<\/p>\n<p style=\"text-align: justify;\">\u201cMany contractors have started to turn down larger projects they believe come with too much risk,\u201d said Atchison. \u201cSo we\u2019re seeing big companies getting bigger, and small companies getting smaller.\u201d<\/p>\n<p style=\"text-align: justify;\">In addition to labour shortages, BC construction faces prompt payment and project procurement challenges.<\/p>\n<p style=\"text-align: justify;\">\u201cIt\u2019s normal in construction for contracts to include 90- to 120-day payment terms,\u201d said Atchison. \u201cThat\u2019s three or four months. There is no other industry where payment terms are this long. The standard in Canada is 30 days. And construction owners keep pushing for longer and longer terms, and they often pay late on top of that.\u201d<\/p>\n<p style=\"text-align: justify;\">Meanwhile, the contractors, most of whom are small \u201cmom and pop\u201d businesses, still have bills to pay.<\/p>\n<p style=\"text-align: justify;\">\u201cThey do that by taking out more debt,\u201d said Atch i son . \u201cThat\u2019s risky, and many construction companies have gone out of business as a result.\u201d<\/p>\n<p style=\"text-align: justify;\">He added that other provinces, such as Ontario, Alberta and Saskatchewan, have instituted prompt payment legislation.<\/p>\n<p style=\"text-align: justify;\">\u201cThey\u2019ve seen that it acts as a deterrent to late payments and, at the same time, is a catalyst for better communication,\u201d Atchison said. \u201cBC has everything it needs to follow suit. Everyone would win: owners, contractors, sub-contractors, suppliers and taxpayers.\u201d<\/p>\n<p style=\"text-align: justify;\">In addition to slow payment, the industry is bedevilled with suboptimal project procurement practices.<\/p>\n<p style=\"text-align: justify;\">\u201cThey lead to escalating costs, expanded timelines and compromised outcomes,\u201d said Atchison. \u201cTaxpayers can\u2019t afford it, and neither can contractors.\u201d<\/p>\n<p style=\"text-align: justify;\">There are excellent guides and standard documents to help owners, he said, but their use is becoming increasingly rare.<\/p>\n<p style=\"text-align: justify;\">\u201cExperienced procurement specialists are retiring, and their replacements have less expertise and less understanding of construction,\u201d said Atchison.<\/p>\n<p>Atchison added that contractors are becoming concerned about the stability of their industry.<\/p>\n<p style=\"text-align: justify;\">\u201cContractors are staying away from projects they would have bid on in the past,\u201d he said. \u201cPart of it is the skills shortage, but a lot of it is also slow payment, increased costs due to supply chain disruptions and shortages and poor owner procurement practices.<\/p>\n<p style=\"text-align: justify;\">\u201cIt\u2019s not worth the risk to them,\u201d Atchison said. \u201cInvesting in infrastructure is important, but you also need to invest in the industry that is called upon to build it.\u201d\u2022<\/p>\n<p><a href=\"https:\/\/biv.com\/article\/2022\/07\/booming-construction-sector-faces-ongoing-challenges\" target=\"_blank\" rel=\"noopener\">Booming Construction Sector Faces Ongoing Challenges<\/a> by Peter Caulfield by BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Findings from the recently released BC Construction Association (BCC A) industry survey show a thriving construction industry that is a major contributor to the province\u2019s prosperity. For example, the value &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/07\/construction-is-facing-skills-shortages-prompt-payment-project-procurement-challenges\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-20314","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Construction is Facing Skills Shortages, Prompt Payment &amp; Project Procurement Challenges &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/www.roryc.ca\/blog\/2022\/07\/construction-is-facing-skills-shortages-prompt-payment-project-procurement-challenges\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Construction is Facing Skills Shortages, Prompt Payment &amp; Project Procurement Challenges &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Findings from the recently released BC Construction Association (BCC A) industry survey show a thriving construction industry that is a major contributor to the province\u2019s prosperity. 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