2019-10-03 12:12:41 Running a Business English An estimated 1 in 14 working Canadians is in the construction industry. Find out what challenges these construction companies are facing in... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2019/10/Construction_Image.png https://quickbooks.intuit.com/ca/resources/business/construction-company-challenges/ %%title%% %%page%% %%sep%% QuickBooks

4 Surprising Challenges for Construction Companies in 2019

2 min read

Construction work in Canada is almost as core to our identity as beaver tails and hockey. An estimated 1 in 14 working Canadians is in the construction industry, which is predicted to become the fifth-largest construction market in the world by 2020 (falling in line behind Japan, India, the U.S., and China). But this growth won’t come without challenges. And even though unemployment rates nationwide hover around 6%, Canadian construction companies are still struggling.

The United States announced tariffs on imported steel and aluminum early last spring, putting a 25% tax on Canadian steel. Steel imports quickly became more expensive than the competition and thus were at a distinct disadvantage in the market. The construction industry took a hard hit as a result, which left construction companies all over Canada wondering what lies ahead concerning business strategy, processes, and spending.

To get a better picture of those tariff-related challenges, TSheets surveyed Canadian construction businesses and revealed four major business challenges facing the industry this year. 

1. Expediting payroll

An essential part of any business, payroll is especially tricky for construction companies that struggle to manage employee time. Over half of construction business owners surveyed said managing time (tracking employee hours and employee scheduling, for example) is the most important payroll process, followed by preparing job cost estimates

2. Upgrading from paper to digital

If employee tracking is the most important part of payroll, it’s interesting to note over 60% of the Canadian construction industry still tracks employee hours through manual methods (pen and paper, punch cards, spreadsheets, etc.). Accepting the challenge to update systems and adopt new technology for administrators could have a tremendous impact on efficiency and save time on payroll.

3. Affording essential materials

While not every company in the industry is feeling the impact of the tariffs, many admit policies are beginning to cost them. 41% of business owners say the tariffs have increased the difficulty of affording construction materials like steel and aluminum. All things considered, saving money on daily processes could be one way for companies to set aside money for expensive materials.

4. Hiring skilled workers

In terms of career outlook, 36% of all respondents say hiring has not been impacted, or they have not seen it affected. But only 19% of those in supervisory or ownership roles continue to hire as planned, and only 17% say jobs are secure, while promotions and pay increases could be put on hold. And the demand for workers is set to increase in places like British Columbia, with the building of the SkyTrain and the Surrey Light Rail project. According to Equipment Journal, the industry will reach out to new demographics to fill positions. 

The next year will be an interesting one for construction. There are great opportunities for businesses of all sizes to pivot along with the changing landscape of the industry and get ahead of the competition by first understanding the challenges. 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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