By all measures, the numbers tell us that 2018 was a great year for the construction industry in Canada and things are expected to stay rosy in 2019. The sector enjoyed six consecutive quarters of higher spending in the non-residential segment, with the industry’s capacity utilization exceeding 92%, the highest it’s been since 1992. But what do the numbers actually mean? And has the industry as a whole truly held its own in the face of tariffs and trade negotiations?
A TSheets by QuickBooks survey of workers, managers and business owners in the construction industry across more than 100 cities in Canada dives in for a closer look at how construction businesses are and have coped in the face of these challenges, what methods are in the works and why the lack of technology in day-to-day operations remains a thorn in the industry’s side.
Construction at a glance: A giant made up of small parts
The construction industry in Canada holds some impressive figures. It hires 1 in 13 workers and accounts for 7% of the country’s gross domestic product (GDP) while maintaining and repairing close to $2.7 trillion in assets.
But what many may not know is that the sector is made up primarily of small businesses. In the residential segment, nearly 70% of businesses have fewer than five employees, while almost half of those in the non-residential segment share the same average.
In most industries, a small team of jacks-of-all-trades can diversify revenue streams. That, however, is not the case for the construction industry. In a sector with bespoke clientele and strict legislation, specialization signals expertise that customers are willing to shell out extra for. It’s also not possible or productive to be everything for every customer, especially when you’re a team of five or fewer.
So when a threat like tariffs appears, reprieves can be few and far between for specialized businesses. In the TSheets survey, 42% of respondents conveyed concern over recent tariffs, with 51% believing the country’s economic growth will be affected negatively by them.
As a result, business owners are considering using cheaper materials, completing more work in shorter times, hiring more seasonal employees and reducing the scope of services provided.
The lack of technology is hurting businesses
Yet a closer look at TSheets’ survey data uncovers how fundamental, day-to-day operational issues remain, even though solutions are readily available.
- 27% of those in a supervisory or ownership role say they struggle with accurate labour and material records.
- 32% wrestle with unreliable job estimates.
The root of the problem of inaccurate records soon becomes clear as respondents shared their labour-intensive time tracking methods.
- 33% use pen and paper.
- 15% use physical time cards.
- 14% use spreadsheets.
- 14% need their manager to track their hours.
If to err is human, imagine all that can go wrong with the above methods. The situation is made worse as small business owners admit to unnecessary payroll delays by running payroll themselves. The Canadian Payroll Association has found that 44% of employees live paycheque to paycheque, while 46% admit that financial stress affects their performance at work. A delayed paycheque would seem like a sure way to chase away good help. But that doesn’t have to the case.
As the economy slows down in 2019, you should leverage technology and automation to secure the most integral parts of your business. From labour tracking to job costing, payroll to record keeping, technology can help construction business owners run a successful business while keeping employees satisfied.
We would like to thank Tsheets by QuickBooks for sharing their survey results and expert insights provided in this post.
How We Select and Evaluate Our Recommended Software
We thoroughly research and test the apps we include in our regular workflow for Client bookkeeping services. After deciding on criteria for evaluating the software and then researching the app itself, we tested the app, noting its strengths and weaknesses. We then work with the app for at least a few weeks before deciding whether to recommend it to our readers. We use the software as it was designed for its intended tasks. For a detailed walk-through of how we select and evaluate software, please see the details of our process.