Canadian Electrical Wholesaler

October 4, 2021

EIN Swati Vora EFC 400By: Swati Vora-Patel, Electro-Federation Canada

As a new year draws near and strategic plans roll out, business leaders everywhere are keeping a close watch on drivers that are setting up new baselines for market demand and opportunities. The pandemic has reset markets, lowering demand in core segments while opening the door to new and emerging areas.

At a recent EFC conference over 500 industry members participated in a two-day online forum to explore the pandemic’s impacts on four key areas affecting our industry: markets, customers, supply chains and employees. The conference featured 17 sessions that addressed trends in these core areas and profiled new opportunities that are cycling in to help members rebound and emerge stronger than before.

EFC presented its latest research report (“Covid-19 Impacts and Opportunities for the Canadian Electrical Industry”) which included, among other findings, an outlook on construction trends and  mile markers that signal where the market spend might be as this industry moves beyond the pandemic. EFC also invited Alex Carrick from ConstructConnect (CanaData) to provide insights on construction forecasts in a post-pandemic era. The following is a summary of key insights:

New Construction Baselines

While the construction market has taken a significant hit during the past 18 months (Canadian construction starts are pegged at 1.7% this year), the market is expected to move towards steady recovery in 2022. This growth is expected to be largely driven by mega projects in these key segments:

Commercial: Although office building construction is not expected to reach pre-pandemic levels until 2025, data centre development is on the rise due to growing digital infrastructure requirements for remote work, online trading, entertainment streaming, 5G technology and artificial intelligence. According to CBRE, Canada has nearly 280 data centres operating, ranking fifth globally for data centre density. While some centres are new developments, many legacy printing facilities are being converted to support the growth of data centres. View this video to tour Canada’s largest data centre, which was once home to the Toronto Star facility in Vaughan, Ontario.

 

 

Institutional/Governmental: The outlook for new construction in this segment is robust. Hospital construction is expected to increase 64% in 2021 largely due to the aging population of Canadians. According to ConstructConnect, new hospital construction in 2020 and 2021 has grown more than eight-fold, year-over-year, due in part to large projects in Vancouver and Toronto. Advances in sustainability will also increase infrastructure spend in wind, solar and battery plant electrification to fulfill ‘greening’ goals for transportation, HVAC systems and liquefied natural gas (LNG) production.

Industrial: Canada has gained some growth in industrial construction from onshoring due to investments in production capacity and the increased automation of industrial processes. Further growth in this segment is attributed to distribution centre expansions and liquefied natural gas (LNG) projects.

  • Distribution centres: Canada’s population density in cities and consumer expectations for real-time, on-demand access to products and services, are driving requirements for decentralized distribution and amplifying the need for ‘15-minute cities’ 
  • LNG projects: according to the International Energy Agency, natural gas demand will return to pre-Covid levels, fueling the start of nearly 20 LNG projects that have been proposed in Canada: 13 in British Columbia, two in Quebec and three in Nova Scotia – with a total proposed export capacity of 216 million tons per annum (mtpa) of LNG. It’s estimated that the equivalent of 30 mtpa LNG exports from British Columbia could add nearly $7.4 billion to Canada’s annual economy over the next 30 years and raise national employment by an annual average of 65,000 jobs.

Residential: The pandemic has catapulted this segment to new heights! The housing market soared more than 50% above its long-term average of 200,000 units during the first half of 2021. While the residential market only accounts for 12% of the full electrical market mix (2021 Pathfinder Benchmarking Report), this segment will be an area for growth as homes continue to play a greater role in Canadians’ daily lives and will require ongoing adaptation to accommodate work-from-home areas and multi-use spaces.

For a comprehensive overview of these and other projections, download ConstructConnect’s Fall 2021 forecast report and visit https://www.constructconnect.com/economic-resources

The Silver Lining: New Market Opportunity

While this pandemic has taken a toll on businesses and the industry at large, it has also paved a path for new opportunities to allow leaders to assess and strategize evolving market needs to emerge stronger. Mega projects in commercial, institutional, industrial and residential markets will drive the construction industry forward and will continue to place reliance on electrical and automation equipment to support infrastructure development and health and safety protocols for physical distancing, sanitization and air quality. With construction growth on the horizon and new product requirements that allow safer work environments, it is time to renew strategies and proceed into the new year with optimism!

 

[1]https://www.constructconnect.com/hubfs/Starts%20and%20PIP%20Forecast%20Reports/2021%20Q2%20CC%20Construction%20Starts%20Forecast%20Report.pdf?bcs-agent-scanner=4f3e4207-817a-1f40-996d-c67f041c1ea2

[2] https://www.cbre.ca/en/about/media-center/toronto-is-north-americas-second-most-active-market-for-data-centre-leasing

[3] https://www.theglobeandmail.com/business/article-should-all-canadian-cities-be-15-minute-cities/

[4] https://www.nrcan.gc.ca/our-natural-resources/energy-sources-distribution/clean-fossil-fuels/natural-gas/canadian-lng-projects/5683

[5] https://canada.constructconnect.com/canadata/forecaster/economic/2021/04/who-knew-a-pandemic-would-lead-to-a-housing-boom

Swati Vora-PatelTalent availability continues to be a key concern among business leaders in the electrical industry: in fact, over 60% of EFC members surveyed said they do not have a robust talent pipeline in place. This pipeline is even further constrained as a result of ongoing employment challenges spurred on by the pandemic.

A global phenomenon known as “The Great Resignation” is underway which reflects a wave of workers who are strongly considering leaving their jobs in search for work that is more closely aligned with their interests with employers who provide flexible accommodations and serve a strong purpose. 

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Building Permits - September 2021The total value of building permits rose 4.3% to $10.1 billion in September, led by Ontario (+6.3%). Construction intentions in the residential sector were up 8.2%, while the non-residential sector decreased 3.2%.


On a constant dollar basis (2012=100), building permits increased 3.4% to $6.9 billion.

Ontario drives residential permits up

High-value permits for two new condo buildings valued at over $300 million in the cities of Mississauga and Toronto helped push Ontario's multi-family permits up 40.4% to $1.7 billion in September. 

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John KerrBy John Kerr

Consolidation is a natural evolution in any industry: technology changes, customers demand more, and the need to drive costs all contribute to this activity. The Canadian electrical market is mature but opportunities still exist in its related segments.

The reality is we are entering a new stage driven by how we define ourselves and how we respond to customer needs. We all understand segmentation today more than ever and desire to provide end users with greater value. 

 

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Gross domestic product by industry - August 2021Real gross domestic product (GDP) rose 0.4% in August, led by increases in accommodation and food services, retail trade and transportation. The continued easing of public health restrictions and further reopening across the country increased demand across many close contact service industries.


Overall, 15 of 20 industrial sectors were up as growth in services-producing industries (+0.6%) more than offset a decline in goods-producing industries (-0.1%).

 

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The event facilitated over 1,200 face-to-face meetings with 40 member companies and 62 supplier companies, cultivating relationship, allowing participants to share best practices and enabling open communication.

 

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Evolution serves over 500 dealers across Canada, who now have the opportunity to get certified for the full line of RTI smart home control and automation products. With products shipping nationwide from its warehouse in Concord, Ontario, Evolution will also offer training and local dealer support to its dealers installing RTI systems.

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SignifyThird quarter 20211


• Signify's installed base of connected light points increased from 86 million in Q2 21 to 92 million in Q3 21

• Sales of EUR 1,643 million; Comparable Sales Growth of -4.8%, impacted by global supply chain disruptions

• Order book increased by 90% in Q3 21 vs. Q3 20

• LED-based sales represented 83% of total sales (Q3 20: 82%)

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Greg WalkerThe Continental Automated Buildings Association begins a new chapter with the appointment of Greg Walker as CEO, succeeding Ron Zimmer. Greg has been with CABA for almost 8 years working closely with the Board of Directors and leading the CABA research program and general operations. 

Mr. Walker is a Certified Association Executive (CAE) with over 15 years of experience working with associations, government agencies, universities, not-for-profit and Fortune 500 organizations. He holds a B.A. and B.Sc. from the University of Windsor and an M.Sc. from Dalhousie University.


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Kerith RichardsBy Alyssa Kerslake

This past July, Kerith Richards, who has worked for Service Wire Company for the last seven years, was selected as one of tED Magazine's prestigious "30 under 35" winners. 

"I was so surprised and totally honored. It meant a lot to me that my boss, and my company, thought highly of me to nominate me - and then to be compared and chosen from the other surely incredible nominees was pretty cool, too," said Richards of earning the distinction. "I was running out of time, I'll be 35 at the end of this year, but I feel like I'm just getting started in this industry." 

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