Construction employment and labour force see strong growth in January 2025

Construction Sector Shows Strength Despite Rising Unemployment Rates

Despite rising unemployment rates, Canada’s construction sector saw significant growth in January 2025, fueled by increased demand, notably in residential construction.According to Statistics Canada’s latest Labour Force Survey, the industry added 61,000 workers, representing a 4.1% increase, while the labour force expanded by 86,100 workers, a 5.3% rise.

Youth-Driven Growth

A notable trend in the sector’s growth was the decrease in unemployment rates among young workers, dropping by 1 percentage point from 15% to 14% over the 12-month period. While unemployment rates rose by 1.3 percentage points for other age groups, this decline in youth unemployment suggests potential opportunities for skilled entry-level positions within the industry.

Rising Unemployment Rates: A Seasonal Trend?

While the overall unemployment rate rose from 8.3% to 9.3% over the past year,construction unemployment rates remain significantly lower than both the two-year (12%) and five-year (15%) averages for January. This increase could be attributed, in part, to the seasonal nature of certain construction activities, particularly civil engineering and homebuilding, which frequently enough slow down during winter months.

Residential Construction Leading the Way

“A closer look at key industry metrics suggests the growth in employment in January might potentially be driven by recovering demand for residential construction, signaled by a rising number and value of residential permits in December 2024,”

Statistics Canada’s building permit data supports this observation, revealing a surge in residential construction permits across most provinces, excluding New Brunswick, during December 2024. furthermore, permits for commercial and institutional buildings also showed positive growth, indicating broader economic recovery.

Provincial Performance

Provincially, British Columbia, Quebec, and Alberta led the way in employment growth, adding 24,400, 23,600, and 20,300 workers, respectively. Prince edward Island and Saskatchewan also witnessed notable percentage increases, highlighting regional strengths within the sector.

Conversely, Manitoba, New Brunswick, Ontario, and Newfoundland and labrador experienced employment losses, ranging from 1% to 17%. Thes variations underscore the importance of understanding regional economic factors influencing construction activity.

Looking Ahead

While rising unemployment rates in the sector warrant attention, the overall trend indicates continued strength and resilience within Canada’s construction industry. The increasing demand for residential and commercial construction, coupled with growing employment opportunities, particularly for younger workers, suggests a promising outlook for the sector.

Construction businesses can capitalize on this momentum by focusing on attracting and retaining talent, investing in skills advancement initiatives, and adapting to evolving market demands. Continued monitoring of economic indicators, regional trends, and evolving consumer preferences will be crucial for navigating future challenges and opportunities.

How are seasonal factors influencing the construction sector’s unemployment rate, considering it remains lower than past averages despite rising national unemployment?

Navigating Unemployment Trends: An Interview with Joe Thompson, Chief Economist at BuildCan

Archyde Interview

With the construction sector defying unemployment trends and showing significant growth, we sat down with joe Thompson, Chief Economist at BuildCan, Canada’s leading construction industry association, to discuss the latest developments and prospects for the sector.

Joe Thompson,
Chief Economist, BuildCan

Growing Despite Unemployment

Archyde (A): Joe, despite rising unemployment rates, the construction sector added 61,000 workers in January 2025. can you explain this seemingly contradictory trend?

Youth Opportunity in Construction

A: The decrease in youth unemployment within the sector is a notable trend. How does this impact the industry’s outlook?

Seasonal Factors in Unemployment

A: While overall unemployment rates rose,the construction sector’s rates remain lower than historical averages. Could seasonal factors be playing a role here?

Residential Construction leads the Way

A: Residential construction seems to be driving the sector’s growth.What other factors might be contributing to this trend?

Regional Variations

A: we saw varying performances across provinces, with some like British Columbia and Quebec leading the way, while others like Manitoba and new Brunswick struggled. What regional factors might be influencing these differences?

Thoughts on the future

A: looking ahead, what key factors should construction businesses be focusing on to maintain this momentum and adapt to future challenges?

A: And Joe, what insight would you like to leave our readers with, as they consider the future of the construction industry?