Canadian Consulting Engineer

Association of Consulting Engineerin Companies (ACEC) Review

Chair Shares ACEC Successes

May 1, 2011   Canadian Consulting Engineer

Chair Shares ACEC Successes

s I look back over the past year as Chair of ACEC, I find that the continued success of our industry is remarkable in many respects. Not only has our membership steadily grown through the economic turndown, it has exceeded our most optimistic projections. This was certainly not the case during the recession of the 1990s.

The significant difference this time is that governments at all levels have recognized that well considered investments in our economic, societal and environmental infrastructure are the key to a successful economy. And our industry and the expertise of our member firms are essential to ensuring that such investments are made prudently, effectively and efficiently. This is a message that ACEC and the 12 provincial and territorial consulting engineering associations across Canada have been taking to government.

In recent years, our profession, our industry and our association have become much more effective in engaging government and opinion leaders. We have evolved and are becoming more comfortable in extolling both the importance and value of our expertise and services to Canadian society. ACEC exists to help its member firms be more successful – and that is what we have been doing. When we succeed, our clients also succeed – both in the public and private sectors. And the ultimate beneficiary of our services is Canada – its people and its standard of living. This is why we need to continue to be unapologetic in our advocacy and to continue our engagement with leaders in government and business.

Our strategic priorities have been and continue to be to build the profile of consulting engineers and to advocate for a better business and regulatory climate for the consulting engineering sector. I am proud of the strides we have made over the past year and am excited as we continue to set ambitious goals for ourselves in the future.

For highlights of ACEC’s recent and ongoing activities please visit: http://www.acec.ca/acec/National_Voice.pdf

Wilfrid Morin, ing., Chair, ACEC Board of Directors

Un mot du Président du conseil sur le succès de l’AFIC

 

 

n dressant le bilan de cette dernière année à titre de président de l’AFIC, je constate que le succès continu de notre industrie est remarquable à plusieurs égards. Notre taux d’adhésion s’est non seulement accru de façon continue malgré le ralentissement de l’économie, mais il a également excédé nos prévisions les plus optimistes. Ce qui n’était vraisemblablement pas le cas durant la récession des années 1990.

Cette différence appréciable est attribuable au fait que, cette fois, tous les paliers de gouvernement reconnaissent que les investissements bien réfléchis dans les infrastructures économiques, sociétales et environnementales constituent la clé de la réussite économique. À plus forte raison, notre industrie et le savoir-faire de nos firmes membres, jouent un rôle primordial dans le processus de réflexion en s’assurant que ces investissements soient faits en toute prudence, efficience et efficacité. Voilà le message que livrent l’AFIC et les 12 associations provinciales et territoriales d’ingénieurs-conseils du Canada au gouvernement canadien.

Ces dernières années, notre profession, notre industrie et notre association ont mieux réussi à susciter l’intérêt du gouvernement et des leaders d’opinion. Nous avons fait des progrès et devenons plus habiles à faire valoir l’importance et la valeur de notre savoir-faire et de nos services auprès de la société canadienne. La raison d’être de l’AFIC est d’aider ses firmes membres à mieux réussir – c’est ce que nous avons toujours fait. Lorsque nous réussissons, nos clients aussi réussissent – tant dans le secteur public que privé. Ultimement, c’est le Canada tout entier qui profite de nos services en améliorant le niveau de vie de tous les Canadiennes et Canadiens. Pour cette raison, nous devons continuer à faire entendre notre voix haut et fort et continuer à faire connaître notre message aux chefs de gouvernement et d’entreprise.

Nos priorités stratégiques ont toujours été d’établir le profil des ingénieurs-conseils et de prôner un meilleur contexte d’affaires et de réglementation pour le secteur de génie-conseil. Je suis fier des progrès que nous avons accomplis au cours de l’année passée et je suis excité en pensant aux objectifs ambitieux que nous nous fixons pour les années à venir.

Pour connaître les faits saillants des activités récentes et continues de l’AFIC, veuillez consulter :

http://www.acec.ca/acec/Voix_nationale.pdf

Wilfrid Morin, ing., Président

conseil d’administration de l’AFIC

 

Design Services Will Be Another Sector to Ride the Commodities Wave

By Alex Carrick, Senior Economist,

Reed Construction Data

One way to gain an understanding of how the building design profession is faring in Canada is to examine its employment levels. A U.S.-Canada comparison adds to the insight.

At their worst points during the recent recession, both countries suffered similar declines in year-over-year design-services employment (nearly -10.0%) in the second half of 2009.

In the U.S., the deceleration in employment growth began in mid-2006. The speculative bubble in U.S. home prices began to leak air in early 2006. The overall drop in U.S. home starts since January 2006 has been 80%.

The recession in Canada took hold in October 2008 after Lehman Brothers fell into bankruptcy south of the border and stock markets, including the TSX, collapsed. Private sector firms retreated into full hunker-down mode, cutting jobs and shelving investment plans. In response, the Bank of Canada lowered interest rates. Relatively quickly, the existing homes resale market pulled out of its steep slide and new home starts improved significantly, with a six-month lag.

Even more important for the building design professions, Ottawa brought down an innovative and forward-thinking infrastructure stimulus package. The provinces and municipalities not only jumped at the chance to be partners, but in many cases launched their own spending initiatives.

How important has that been for the industry?

CanaData compiles a monthly list of the Top Ten construction projects. From April 2009 through September 2010, 160 of the 180 largest projects were either institutional or engineering in nature. That’s unprecedented.

Those categories are traditionally financed by the public sector. Even commercial projects on the list were often government-financed, such as community recreation complexes or city hall alterations.

Washington also brought down a stimulus spending program but it wasn’t as effective. Much of the money funneled to the state level was used to pay for general expenses. Some U.S. states continue to face huge funding shortfalls.

A 12.3% decline in U.S. design-services actual employment occurred between April 2008 and November 2010. In Canada, the collapse wasn’t quite as bad or as long, lasting from October 2008 to March 2010.

More interesting, from January 2000 to April 2008, overall employment in U.S. design services rose 21.3%. In Canada, the comparable figure was a much higher 4
9.0%. Employment by Canadian design services firms increased at more than double the rate of the U.S. The explanation for this discrepancy lies in both the nature of the construction markets in the two countries and what has been driving demand.

The residential sector has held up much stronger in Canada. But also, there is an even more important factor driving demand and that is commodities. The emergence onto the world stage of China, Southeast Asia, Brazil, India and several other nations has greatly expanded international raw materials markets.

An example was global oil reaching a record high $147 USD per barrel in July 2008. In much of the 2000s, Canada experienced explosive growth in mega construction projects related to commodities (e.g. Alberta Oil Sands, Atlantic offshore work as well as potash, uranium and diamond mining projects) and electric power generation.

During the financial crisis, the world saw some fall-back in commodities demand and pricing. However, with ongoing strength in China and a U.S. economy finally coming out of its shell, the climb in commodity prices is back in full swing. Furthermore, the popular uprisings in the Middle East and North Africa nations are adding a “risk” premium to the price of oil.

Reed Construction Data – CanaData is expecting the value of total new construction in Canada to increase 25% between 2011 and 2014, from $240 billion to just over $300 billion. Both of those figures are in current dollars.

The average annual increase in “real” (i.e. inflation-adjusted) residential construction spending over the next three years will be +2.0%. The non-residential building increase will be +3.0%. And thanks to the commodity effect, the average annual growth rate for engineering construction will be +4.0% to +4.5%. The latter is close to full capacity for the sector given material and manpower limitations.

A degree of uncertainty remains for the world economy based on continuing debt problems in Europe, civil unrest and military action in several Arab nations, Chinese moves to restrain inflation and the earthquake and tsunami in Japan.

But with Ottawa’s stimulus set to expire in October, the private sector is increasingly stepping forward with investment plans. Higher commodity prices are a particular incentive for owners in the natural resources sector to undertake projects. The design professions will be one of the chief beneficiaries.

 

Niche Sectors, Emerging Markets

Opportunities for Canadian CE Businesses Abroad

The following article is provided by Export Development Canada, a corporate partner of ACEC

Canadian infrastructure companies have enjoyed fair success in some of the more remote parts of the world and Canadian expertise could play well in certain niche markets such as medical and athletic facilities.

Françoise Faverjon-Fortin, vice-president of infrastructure and environment with Export Development Canada (EDC), travelled with her team to the Middle East in December to showcase Canadian construction and engineering companies. While the visit explored opportunities in the power and water sectors, they found that there was as much interest about Canadian capability in the health and sports infrastructure sectors. And it’s not just that part of the world.

Much of the infrastructure demand for sporting facilities is coming from nations such as Brazil, that are hosting premier sporting events such as FIFA and the Olympic Games. Brazil plans more than $1 trillion in construction projects, to bring its airports, roads and other infrastructure up to date in preparation for these events, opening up huge opportunities for foreign investors.

Furthermore, Brazilian authorities expect that local suppliers will be unable to meet developers’ needs. And Canadian construction and engineering firms are no strangers to this field, having worked on the Vancouver and Calgary Olympic winter games and various other sporting major events. But Brazil’s infrastructure needs go beyond these large sporting venues and Canadian companies could capitalize on these needs in the coming years.

“Canada has a great reputation abroad with respect to its infrastructure capability,” says Ms. Faverjon-Fortin. “We have a great deal of public-private collaboration here in Canada. When Canadian firms are successful at home, it’s easier to sell that capability and expertise abroad.”

Brazil is a priority market for EDC where it has staff in both Rio de Janeiro and Sao Paolo, supported by a team in Ottawa. That said, Brazil is not without its challenges, including expensive tax regimes and strong local and foreign competition. To succeed in Brazil, Canadian companies must develop a local presence, commit over the long term and adapt to the rigorous market requirements.

“Take a long-term view of the market,” advises Ms. Faverjon-Fortin. “Develop a local presence for visibility with key clients and after-sales service, invest in local partnerships and consider joint ventures and strategic alliances. And get good legal and accounting advice.” EDC will be participating in an infrastructure trade mission to Brazil this June.

ACEC Summit & Annual Convention

 

Register today!

Montebello, Québec

June 23-25, 2011

 

This year’s Summit will be held in the luxurious, rugged Chateau Montebello

famed for its stunning red cedar log Chateau and rustic elegant surroundings.

Summit Theme

Building Strong Organizations:

Understand. Relate. Communicate.

 

With the threat of decreased business opportunities as a result of the recession, firms have been forced to fine-tune, re-align, and restructure operations. Consequently, leaner, stronger organizations have emerged.

 Visit www.acec.ca for more details!

 

 

Don’t Miss Special Keynote Speaker –

Dr. Sean Richardson! 

ACEC is pleased to welcome Dr. Sean Richardson  to this year’s Summit as its keynote speaker. A former

elite athlete and psychologist, Dr. Richardson is a high

performance coach and mentor with a proven track

record in helping businesses understand the

psychological barriers to success.

Don’t miss his expert advice!

 For more information on Dr. Sean Richardson and the entire Business Program, visit www.acec.ca today.


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