Market Report, "Canada Infrastructure Report Q1 2013", Published

Recently published research from Business Monitor International, "Canada Infrastructure Report Q1 2013", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 02 February 2013

BMI View: Canada remains our developed market construction sector outperformer. Despite the potential threat from an overheating housing market, commodity price weakness and an underperforming commercial building segment, we believe the country's construction industry growth will outperform its developed market peers over the near term. Following a deceleration in construction industry real growth in 2012, we expect a pickup in 2013 (3.8% year-on-year in real terms). This view id supported by the country's infrastructure sector, due to the high number of rail and electricity projects in the pipeline.

Data for the first eight months of 2012 is in line with our belief that construction growth slowed as the year progressed, from the 4.1% year-on-year (y-o-y) real growth seen in 2011. As a result, we are maintaining our estimated 3.2% y-o-y growth for full-year 2012. Despite the sector moving into 2013 with less momentum than in previous years, we expect growth to pick up, with a number of high value infrastructure projects due to enter the construction phase. We also expect the non-residential segment, which weighed on growth over 2012, to pick up as a result of industry projects linked to natural resource extraction and processing. However, the housing segment will continue to decelerate slowly.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/529306_canada_infrastructure_report_q1_2013.aspx?afid=201) (http://www.fastmr.com/prod/529306_canada_infrastructure_report_q1_2013.aspx?afid=201)

The greatest risks to our outlook come from a sharper-than-expected decline in the housing sector, slowing demand and falling prices in the commodity sector, which are forcing developers to stall new capital investment, thereby impacting supporting infrastructure and industrial projects.

Infrastructure Foundation For GrowthInfrastructure remains a fundamental element of Canada's construction industry growth, with a project pipeline in excess of US$120bn. Whilst we envisage belowtrend growth in 2013 and 2014, there is significant upside to our view if projects are able to bypass regulatory red tape quickly.

One of the strongest sub-sectors over our 10-year forecast period will be railways, where a project pipeline worth US$36bn will drive annual average industry value real growth to 4.3% between 2013 and 2021. This growth will be driven primarily by urban rail projects, including the CAD8.2bn Eglinton Crosstown Light Rail Transit project, the US$2.6bn Toronto Subway Spadina line expansion, the US$2.1bn Ottawa Light Rail project and the US$1.8bn Edmonton Light Rail project.

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