TD economists see construction industry outshining others

With the United States economy slumped in what economists have called a “shallow but prolonged” recession that might not end until 2009, fears are growing about what will be the effects on the Canadian economy. CCE asked TD Bank Financial Group how they viewed the immediate prospects for the construction industry in Canada.
Paschal Gauthier, regional and sectoral economist at TD Bank, says that although they are revising their forecasts slightly downwards for 2008, the non-residential construction and engineering sector is still expected to outshine all others. In their February forecast TD highlighted that non-residential construction and engineering projects were actually going to be the top performers in 2008 and 2009 for Canada. While he would now revise the estimates slightly lower by a few decimal points, the ranking would be the same, Gauthier says.
Gauthier says that in February they forecast growth of 7% in the non-residential construction and engineering sector, whereas now he might estimate it at 5% or 6%. He says this is a solid base of growth, especially compared with how the rest of the economy is expected to do. The projected rate of growth in the overall Canadian economy for 2008 is just 1.9%.
“There’s just a tremendous amount of infrastructure in the pipeline,” says Gauthier reassuringly.
TD’s current forecast for the non-residential construction and engineering sector for 2009 is 5% growth. For 2007, the bank estimates the annual growth rate in the sector was 5.8%.