HEAVY INDUSTRIAL CONSTRUCTION AND

MAINTENANCE WORKFORCE OUTLOOK

TO 2020

May 2017

HIGHLIGHTS OF SPRING 2017 UPDATE

– The projection identifies a drop in labour demand in 2018 with a slow upswing later in 2018. It is recognized that project plans in the current environment are very fluid and any changes will impact the future labour demands.

– Labour demand is lower than projected in previous years due to an increase in the number of projects that have been cancelled or delayed due to low oil prices.

– Labour demand is projected to go up from mid-2018 to 2020, however, the 2018-2020 numbers are considered soft as a number of projects under development may not proceed.

– Ongoing maintenance is a stabilizing influence on construction trades since existing facilities are getting older and new facilities are coming into production.

– The top five occupations with the highest demand include boilermakers, pipefitters, labourers, carpenters and electricians. As the model does not incorporate labour supply projections, no comment is made on supply-demand relationships. Industry representatives have reported that, with the exception of boilermakers, other trades have not been difficult to recruit.

2

PURPOSE AND BASIS OF WORKFORCE

PROJECTIONS

• The Sector Intelligence Model (SIM) for Heavy Industrial Construction, formerly OILMAP, is a collaboration between the government of Alberta and COAA that has been in place since January 2012.

– The purpose is to provide a better understanding of the heavy industrial construction and maintenance workforce demands in Alberta.

• The projections are based on micro-economic modelling that is updated twice a year: Spring (May) and Fall (November).

• The projections include projects that have been validated by individual companies. Only projects that have a validated start date are included in the model.

• The projections for the ongoing and turnaround maintenance are based on data from the General Presidents’ Maintenance Committee for Canada and the National Maintenance Council For Canada.

3

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE

DEMAND METHODOLOGY

SECTOR INTELLIGENCE MODEL (SIM)1. Calibration Factors based on past construction projects

– Total Project Workforce Projection, based on

• Type of Project (e.g. oil sands, petrochemical, pipeline, power)

• Size of Project, measured by output capacity (e.g. bpl/day, mlbs/year, MW)

– Workforce Breakdown

• By Trade

• By Stage of Project

2. Projection of Current and Future Construction Demand

– Identify Projects Planned or In-progress

• Type (e.g. oil sands, petrochemical, pipeline, power)

• Size (e.g. bpl/day, mlbs/year, MW)

• Start/End Dates

• Status (e.g. received regulatory approval)

– Projection = Sum of Month by Month Project Demands

3. Reasonableness Review by Industry Practitioners4

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE DEMAND

METHODOLOGY: SECTOR INTELLIGENCE MODEL (SIM) APPROACH

5

Projects In Progress or Planned Projects,

Reported by Companies

Construction Demand by

Project Type, Project Stage, and

Trade

General Presidents’ Maintenance

Committee for Canada

Maintenance Demand by Trade

National Maintenance

Council for Canada

Trade Breakdown by Project Type and Project

Stage

Proportion of Modularization by

Project Type, Project Stage and Trade(Assume all module

fabrication occurs in AB)

Construction + Maintenance

Demand Projection

Assume Alberta = 85% of West Data*

Alberta Data

* “West Data” includes maintenance trade-hour data for Saskatchewan and Alberta.

** “Project Type” includes oil-sands, petrochemical, and power projects.

Projected Production Capacity by Project

Type**

SPRING 2017 UPDATE: SECTORS

• Updates were collected from companies between March and May 2017:

1) Heavy Industrial Construction Projects:• On-Site Construction

– Oil Sands (Mining, In-situ, Upgrading)

– Petrochemical

– Pipeline (Pipelines, Pump-stations, Terminals)

– Power Generation (Wind, Gas, Solar)

• Off-Site Module Fabrication

– Oil Sands (Mining, In-situ, Upgrading)

– Petrochemical

2) Maintenance Projects:• Ongoing maintenance

• Turn-around maintenance

6

SPRING 2017 UPDATE: PROJECT CATEGORIES

There are seven categories:• Projects included in the model:

– “Planning Stage” with or without anticipated start and end date.

– “Received Regulatory Approval” and plan to proceed with start/end date.

– “Construction In-Progress” with start/end date.

– “Postponed” but have an anticipated start and end date.

• Projects removed from the model:– On-Hold with no start date identified.

– Cancelled –removed from a companies capital plans.

– Completed – project is operational with no construction workforce on site.

7

SPRING 2017 UPDATE: SURVEY RESPONSE AND REASONABLENESS

• 132 companies were contacted to gather information.

– Due to changes within the industry, 15 companies were sold or merged over the last year.

– There was a high response rate from the 117 active companies (75%).

• A total of 538 projects were identified of which 303 are in regulatory approval stage or planned to proceed.

– 156 projects have been reported as on-hold with no start date.

– 34 projects were reported cancelled.

• Reasonableness checks with COAA indicated that the projection reflects the current environment with the exception of slide #14.

– The actual workforce numbers for on-site workforce is higher than the model indicates . • This is due to unreported project delays and project overruns: the model

showed the workforce ramping down, in actuality workforce was continuing at full strength.

8

SPRING 2017 UPDATE: TOTAL PROJECT COUNT

9

Sr.

Stat

us

Min

ing

In-s

itu

Up

grad

ing

Nat

ura

l Gas

P

rod

uct

ion

Nat

ura

l Gas

P

roce

ssin

g

Pet

roch

em

ical

Pip

elin

es

Pu

mp

-St

atio

ns

Term

inal

s

Win

d P

ow

er

Gas

Po

we

r

Sola

r P

ow

er

Hyd

ro P

ow

er

TOTA

L

1 Planning Stage 5 43 3 0 1 2 23 2 3 22 9 0 2 115

2Received Regulatory Approval and Plan to Proceed

0 14 0 2 2 1 21 7 2 3 13 2 1 68

3 Construction In-Progress 2 11 9 8 8 4 40 13 13 2 9 0 1 120

4Postponed (provide anticipated start and end date)

0 4 0 0 2 0 2 1 0 0 2 0 0 11

5On-Hold (cannot identify the start and end date)

7 94 11 1 0 2 11 5 4 2 18 0 1 156

6Cancelled (completely no plan to proceed)

0 13 0 1 1 0 11 1 0 0 7 0 0 34

7Completed (Construction done and ready to start production)

2 9 0 0 2 6 6 2 3 2 2 0 0 34

TOTAL 16 188 23 12 16 15 114 31 25 31 60 2 5 538

TOTAL PROJECT COUNT – HISTORY

10

331

483 445

265351 314

38176

235

277

224

0

100

200

300

400

500

600

700

2014 Fall 2015Spring

2015 Fall 2016Spring

2016 Fall 2017Spring

Nu

mb

er

of

Pro

ject

s

In-Active Projects (Status #5 - #7)

Active Projects (Status #1 - #4)

331

521

621

500

628

538

163219 188

147 167114

5

1111

69

7

112

151161

59

126

127

51

10285

53

4966

0

100

200

300

400

500

2014 Fal l

2015 Spr ing

2015 Fal l

2016 Spr ing

2016 Fal l

2017 Spr ing

Nu

mb

er

of

Pro

ject

s

Power

Pipeline

Petrochemical

Oilsands

331

483445

265

351314

Active Projects

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE

WORKFORCE DEMAND PROJECTION TO 2020 – BY SECTOR

11

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2017E

2018F

2019F

2020F

Nu

mb

er

of

Job

s TURNAROUND MAINTENANCE

ONGOING MAINTENANCE

MODULE FABRICATION

PIPELINE

PETROCHEMICAL

POWER

OILSANDS

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE

WORKFORCE DEMAND PROJECTION TO 2020 – BY OCCUPATION

12

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2017E

2018F

2019F

2020F

Nu

mb

er

of

Job

s

Construction Managers & Supervisors

Welders

Truck Drivers

Structural Iron Workers

Sheet Metal Workers

Scaffolders

Reinforcing Iron Workers

Pipefitters

Painters

Millwrights

Mechanics and Oilers (Pipeline)

Labourers

Insulators

Instrument Mechanics

Heavy Equipment Operators

Environmental Supervisors (Pipeline)

Electricians

Cement Masons

Carpenters

C&H Equipment Operators

Boilermakers

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE

WORKFORCE DEMAND PROJECTION TO 2020 – TOTAL

13

0

15000

30000

45000

60000

75000

90000

2014 2015 2016 2017 2018 2019 2020

Nu

mb

er

of

Job

s

2014 Fall Projection 2015 Fall Projection 2017 Spring Projection

HEAVY INDUSTRIAL CONSTRUCTION WORKFORCE

DEMAND PROJECTION TO 2020 – ON-SITE AND OFF-SITEOn-Site Construction

14

0

5000

10000

15000

20000

25000

30000

35000

2014 2015 2016 2017 2018 2019 2020

Nu

mb

er

of

Job

s

2014 Fall Projection

2015 Fall Projection

2017 Spring Projection

0

2000

4000

6000

8000

10000

12000

14000

2014 2015 2016 2017 2018 2019 2020

Nu

mb

er

of

Job

s

2014 Fall Projection

2015 Fall Projection

Off-Site Module Construction

Note: The model assumes that all module fabrication is completed in Alberta

HEAVY INDUSTRIAL MAINTENANCE WORKFORCE

DEMAND PROJECTION TO 2020 – ONGOING AND TURNAROUND

Nu

mb

er

of

Job

s

Ongoing Maintenance Turnaround Maintenance

On-Site Maintenance Total

15

-

4,000

8,000

12,000

16,000

20,000

2017E

2018F

2019F

2020F

-

4,000

8,000

12,000

16,000

20,000

2017E

2018F

2019F

2020F

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2017E

2018F

2019F

2020F

Turnaround Maintenance

Ongoing Maintenance

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE

WORKFORCE DEMAND PROJECTION TO 2020 - BY TYPE OF PROJECT

Distribution of Workforce Projection by Type of Project

16

35%

42%

23%

2017

41%

40%

19%

2020

On-Site andModule

OngoingMaintenance

TurnaroundMaintenance

HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE WORKFORCE

DEMAND PROJECTION TO 2020 - DISTRIBUTION BY OCCUPATION (2017-2020)

17

Boilermakers19%

Scaffolders14%

Heavy Equipment Operators

13%Labourers

8%Electricians

6%

Millwrights5%

Painters 5%

Environmental Supervisors (Pipeline)

4%

Others26%

NEXT FORECAST UPDATE• The next forecast will be completed in May 2018.

• Data gathering will take place from February to April with the target to complete the forecast by May.

• GOA is establishing an on-line data collection tool for this survey to streamline the process.

• Employers will have the ability to update their project information in an easier, more efficient and secure environment.

• GOA will be contacting all contributors in February 2018 to provide information on how to access this new system.

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