By Nick Gilbert
Research and Markets has included a new report titled ‘Canada Infrastructure Report Q3 2012’ to its catalogue.
Australia is the closest competitor to Canada because growth in Australia has been spurred by a similar combination of an overheating housing market, natural resource extraction associated infrastructure, and public investment in transportation. Nevertheless, downward revision of estimated construction industry value of Australia for 2012 to a weak real growth target of 0.5% for the year, with regard to a sharp sluggishness in the housing sector and reduction of capital expenditure strategies promoting natural resource extraction, increases concerns over the growth trajectory of Canada.
Canada may experience a similar fate like Australia, particularly if commodity prices keep on declining and efface capex plans, or if the housing market collapses and Canadian public sector and banks get affected and cut back financing to the infrastructure sector. Nevertheless, some sectors will outperform the overall trend. Railways infrastructure is one of the strongest performers and with a project pipeline valued at US$21 billion, the sector will achieve an annual average industry value real growth of 5.1% between the period 2012 and 2016. This mainly consists of urban rail projects, which include the Edmonton Light Rail project, the Ottawa Light Rail project, the Toronto Subway Spadina line expansion, and the Eglinton Crosstown Light Rail Transit project.
On the other hand, very few number of port or airport projects are on the card such as the redevelopment of Calgary Airport. The growth of the overall infrastructure sector will get affected by the weak growth in both sub-sectors. Nonetheless, with US$80 billion project pipeline, the infrastructure sector growth will remain strong as a whole, with an estimated 3.7% of annual average real growth between the period 2012 and 2016.