There are numerous challenges facing the building industry these days, not just in Canada but in many other parts of the world. For one, there’s generally a lack of skilled trades workers entering the construction business.
Environmental sustainability and risk mitigation seem to be ever-increasing tasks for building contractors, and geopolitical events like Brexit and ongoing trade wars are restraining new construction efforts in some regions.
Piling Canada touched base with two companies that specialize in ground engineering and piling solutions – Keller Canada headquartered in Acton, Ont., and the British firm Aarsleff Ground Engineering Ltd. that’s based in Newark, England – to get their take on how the construction business in Canada as well as in the United Kingdom and elsewhere in Europe are faring and coping with today’s industry challenges.
Impact of Brexit
Kevin Hague is managing director for Aarsleff Ground Engineering. He says the impact of Brexit on the construction industry in Britain has been profound and continues to resonate as the long, arduous process of negotiating a withdrawal from the European Union, which started in 2017, continues to drag on; months past the original March 2019 deadline.
“There is a general feeling of uncertainty in the money markets. Investors seem to be slowing down a little bit, which as a result turns into delays on site and projects stalling. Once that starts, everyone else starts to think the same way, so we end up in a position where we actually also talk ourselves into delays on projects,” said Hague.
“We’re seeing that daily here. We’ve got a fairly sizable project in Sheffield in the U.K. that we have had on our books now for three years, and we haven’t actually done anything yet. It’s not uncommon for that to be the case.”
Hague says there’s also the matter of supply chain uncertainty surrounding Brexit. He notes that Aarsleff Ground Engineering often relies on German equipment and support services as well as steel supplied by mills in Germany and Spain – but what happens once Britain leaves the European Union is unclear.
“If Brexit goes through, how easy will it be to get the parts we need through customs?” Hague wondered.
Hague says Brexit is also raising concerns about the construction workforce and a possible shortage of skilled trades workers in Britain’s building industry.
“There’s uncertainty about movement of people and skills shortages, especially in the area of ground engineering,” Hague said. “If we close up the borders with Brexit, what do we do next? We’ve got some very good, very skilled migrant workers from Europe. If we should shut the doors to them, where do we go from there?”
Hague says one bright light for the construction industry in the U.K. has been a commitment from the British government to fund a number of new major infrastructure projects. Among them is the High Speed 2 (HS2), a new high-speed railway line linking London to Birmingham and eventually Manchester.
“That has been talked about for a long time, and it will be the stimulus for a lot of construction in the U.K.,” Hague said. “There’s a lot of work happening on it, demolition work, site preparation, but there’s no physical permanent work of any magnitude starting at the moment.”
Hague says aside from large capital projects like the HS2, the construction market in Britain “starts to look a little bit more challenged.
“There’s been a shortage of domestic housing in the U.K. We need to be building around about 200,000 homes per year to keep up with population growth and demand. We simply aren’t doing that,” he said. “There will always be demand in the domestic market for residential builds, but it’s very slow at times. The market is saturated for construction, which drives the prices down and it puts pressure on the margins.”
Hague says dealing with all the uncertainty surrounding Brexit has been very difficult, and not just for people in the construction industry.
“If we went back to referendum, I think we’d have a very different outcome, but that’s only my personal opinion,” he said. “It’s been so long since we took the vote, and you’re starting [to] hear things from some people like, ‘Just get it done,’ or, ‘I’m an actioner,’ meaning: ‘I just want action to get us out of this almost no-man’s land that we’re in.’ It’s very frustrating for us all.”
Impact of tariffs
Fazli Shah is senior project manager for Keller Canada. He says the U.S. government’s decision to impose tariffs on important metal building materials (25 per cent for steel and 10 per cent for aluminum) in 2018 has had a “very significant” impact on the construction industry in Canada.
The tariffs were removed earlier this year, but prior to that, the duties led to a sizable increase in material costs for building projects in this country.
Shah says the tariffs also resulted in a great deal of uncertainty around steel prices that made it difficult for piling companies and others in the construction sector in Canada in terms of cost control.
He says the Canadian construction market is feeling the effects of political uncertainty in some regions of the world as well as a slowdown in important global markets in China and elsewhere that’s putting a damper on the Canadian economy.
“In general, the construction industry is always driven by the economic growth. With Canada being a commodity- or natural resources-based economy…when an economic slowdown happens, as it is right now, that slows everything down,” he said.
However, Shah expects the Canadian construction market will bounce back quickly once global economies start to heat up again.
“The construction industry is very much at the front end of this process because it gets affected really rapidly as soon as a slowdown happens. The same goes for when an economic rise happens – some other sectors of the society may see the trickle-down effect a little later, but the construction industry is usually one of the first to react to it.”
Market conditions in Europe
Hague says Aarsleff Ground Engineering, which is a subsidiary of the Danish civil engineering and construction company Per Aarsleff A/S, does business in number of other European countries aside from the U.K., including Germany, Poland, Sweden, Norway, and Denmark.
Hague describes the current building situation in other European markets beyond the U.K. as “a bit of mixed bag,” with no construction market either extremely strong or extremely weak at the moment.
“From what we see in Germany, there is definitely construction going on, but it seems to be more specialist activity,” he said. “It’s a broad mix in France. There are some major capital projects, such as [a] large metro system being built in Paris right now that’s taking up a lot of resources and a lot of equipment.
“In Sweden, we’re seeing reasonable market conditions for the type of ground engineering work that we’re involved with there,” Hague added. “Denmark has been a good market for us this year, with a lot of construction activity going on.”
Piling solution differences
Hague says there’s a wide range of piling methods employed across Europe, with different regions, countries or even cities favouring different kinds of piling solutions.
“There are differences. They are regional. They are cultural. And ground conditions also drive these differences,” he said.
“In the U.K., the traditional piling method is rotary bore. The driven pile is not the natural choice. In Europe, it’s very different. The natural choice is a driven pile mostly. There will be some rotary bored pile, but it’s the less favoured method. So, we have two very different approaches,” Hague said.
“Even within Europe, we’ve got different types of driven piles, different sizes which are accepted and also different design philosophies to drive the different pile types. For example, in the city of Gothenburg in Sweden there’s something called ‘Gothenburg pile,’ which is a timber pile with a precast top. And it’s because of the specific ground conditions there that we only really see that in Gothenburg.”
Shah says there are regional differences within Canada too in terms of what piling solutions are the most prevalent.
“In the east, people use drill shafts and secant pile walls a lot more,” he said. “Some of this is driven by geological conditions and the technical needs and requirements of a [given] project.”
It’s perhaps not surprising that such differences exist in a country such as Canada, which comprises a vast area and has a wide range of environmental and climatic conditions. However, Shah contends some of this may be driven by personal or institutional biases as well as a lack of information.
“If some people are not aware of what [different options] exist and what can be done differently, then obviously they will be resistant to it,” he said.
Shah says one example is the how continuous flight auger piles, which have been used in Canada for 20 years, still aren’t accepted by the Alberta Department of Transportation.
“If the need [for one option] is driven by Mother Nature, that’s no problem because people need to respect Mother Nature and treat it accordingly,” he said. “But if the decision is made because of a lack of information, then [different options] should be examined in a neutral way.”
Skilled trades shortage
Hague acknowledges that his company, like so many others in the European construction sector, often struggles to find good caliber skilled individuals to fill positions.
“It’s very difficult to attract the right kind of person or a quality stream of people because many people who work in factory conditions or wherever else are used to working inside for good money without the travel,” Hague said. “People just prefer to be a little bit warmer and not as wet; I suppose. We see that daily.
“We need to attract more young people because the average age of our workforce is increasing and that’s not necessarily a bad thing. But, you know, we’ve got to look at a succession plan,” he added.
Hague notes that many construction companies in the U.K. will rely on career and trade fairs as well as structured training programs to recruit and retain workers, which is something Aarsleff Ground Engineering offers.
Hague says his company is considered somewhat of a trailblazer when it comes to trying to appeal to the hearts and minds of young people.
“What we’re trying to do now is a little bit unique. We’ve developed a virtual reality construction world to try and appeal to the younger generation in the gaming world,” he said. “For young people leaving school who don’t necessarily want to go on to university, this provides them with a platform so they can get a sense of what a construction environment looks like.
“So far, our recruitment drive and our focus and our message seems to be stirring up interest,” Hague added. “Time will tell.”
According to Shah, Canada’s building industry has long benefitted from Ottawa’s immigration policies. Canada, he says, is one of the most welcoming countries in the world for immigrants, many of whom have stepped in to help fill the need for skilled trades workers in this country.
Shah says construction companies in Canada have a number of options for recruiting and retaining quality staff, which include good training opportunities and health and safety programs.
He adds that ensuring skilled trades jobs are more sustainable, in other words, that they pay enough and last long enough for workers to make a decent living, are other measures companies can take to make careers in the building industry more attractive.
Climate change
Hague notes that due to climate change, there’s been an increase in extreme weather events like excessive rainfall that are causing problems related to flooding, mudslides and slope stability issues in many areas of Europe.
For this reason, he says, there is more construction work going on to address these issues and come up with engineered solutions like flood defense systems and slope stabilization projects.
“We do work actively in all sectors in the U.K. and in Europe on flood defense systems. We’ll do two or three of them every year,” Hague said.
Shah says a significant issue related to climate change that’s affecting the construction industry in Canada is the melting of the permafrost across wide swaths of the warming arctic.
Across the North, many communities are undergoing profound changes due to the damage caused by unstable soils that result from permafrost thaw. Pilings driven down into the permafrost layer are used extensively to support structures in the Canadian arctic, so when that layer melts it can affect the stability of a driven pile foundation.
Environmental sustainability
According to Shah, there is increasing awareness of the need for environmental sustainability within the building sector in Canada.
“Everybody is aware of the environment and that there are things that need to be done. All people can do is try to be efficient and always reduce, recycle and reuse when they can. I think the construction industry is well-placed to address those challenges,” he said.
Shah notes LEED certification of building projects is one example of the initiatives introduced in recent years aiming at making Canada’s construction sector greener.
Another measure is the new carbon taxes being brought in by different levels of government within Canada. Shah says the building industry in general has taken the new tax in stride.
“I’d say the construction industry has reacted to it as it would to any other new tax,” he said. “Things have become a little bit more costly, but that’s what the tax system is all about. Everything is done for a purpose, for a bigger purpose.”
According to Hague, the U.K. also has numerous initiatives aimed at promoting environmental sustainability within the construction sector.
For instance, the sovereign state has a legally binding commitment to achieve an 80 per cent reduction in carbon emissions by 2050, which could make precast piles that are produced offsite a more favoured piling option in the foreseeable future.
“The carbon zero target is becoming more and more of a buzz word, but I’d say it’s not necessarily happening. There is still a lot of in situ work happening, a lot of large diameter in situ pile, a lot of large bridge abutment in situ pores,” said Hague. “However, there are one or two companies who are trailblazing the use of pre-cut foundations and precast piles, which is what we do.”
Hague contends that the precast offsite manufacturing option is more environmentally friendly “because it is a much more controlled environment and there’s less traffic movement as well.
“Something that’s hidden is the quality side of it. If we get it right off-site, we’d like to think it will be right in installation. If it’s right in installation, it’s a one-time process. And if it’s a one-time process, it’s executed only once,” he said.
“There’s no corrective work, which means it’s more efficient and things get built more quickly, therefore reducing the overall build program and in theory, reducing the environmental impact of the project.”
Hague says other initiatives aimed at increasing environmental sustainability within Britain’s building industry involve promoting plants with low greenhouse gas emissions as well as the use of alternate construction materials.
“We are very carbon conscious in our factory. We target some Green KPIs (Key Performance Indicators). We recycle rainwater and we also recycle waste products. We’re looking at more sustainable materials, trying to incorporate waste products into construction materials such as glass, PFA (Pulverised Fuel Ash) and shredded tires,” said Hague.
“We’re modernizing our fleet, using technology more and bringing in more efficient engines and machines which can actually react to the ground conditions,” he said.
“We’re not just sticking the machine on high rev and letting it burn off diesel oil all day,” he added.
“We’re educating our people as well. Green has become a topic of conversation in our briefings [and] we are constantly reminding the guys, ‘Switch your engines off on a break if you don’t need to use the machine.’”
Technological innovation
Hague says one of the ways new technology is having an impact on the construction industry in Britain involves virtual reality.
“We’re starting to embrace virtual reality analysis in the U.K. It’s more of a virtual world where people can experience construction in the virtual space,” he said.
Hague notes that his company plans to eventually roll out virtual reality training for its workers, enabling them to see and experience what they’re meant to be doing on the job site while they’re in the virtual space.
Shah says computerized, remote control data acquisition and sharing systems are among the new tools and techniques that are transforming the construction industry in Canada.
According to Shah, these systems make communication between the company office and the job site much more efficient.
“The office always knows what is going on, and if anything needs to be changed, they can communicate with operators and the crews in real time,” he said.
“It also gives the designer more timely control of their design assumptions and changes if needed, and it gives the worker more insight into what they are doing and why they’re doing it.”
One-stop shopping
According to Shah, more and more construction companies in Canada are adopting a one-stop shop approach to project procurement.
“Perhaps years ago, the construction industry and piling companies specifically might have been doing only one technique, let’s say either drilled piles or driven piles,” he said.
“Now, many cannot sustain their business if they don’t offer more. Sometimes single projects require two or three different techniques, so a client may want to go to someone who is one-stop shop rather than dealing with two companies.”
Shah notes the benefit to piling companies and their customers is that it can be more cost effective.
“For example, if a company is able to offer two or three different techniques, they can sometimes share resources [internally] because some of the resources may not be needed all the time,” he said.
“So, if you have support equipment and it can serve two rigs working two different techniques, you save money and then ultimately the savings can be passed on to your client as well.”
Hague says within Europe, there’s also a growing movement by construction businesses to adopt more of a package approach to services rather than offering a single service.
“Companies are wanting to place package work more so they can offer more techniques, more solutions,” Hague said. “It’s certainly a trend that we’re seeing more and more in the U.K. and in the rest of Europe as well, especially in Poland.
“Instead of splitting a contract to different elements, there’ll be a single order for a multiple-discipline contract. Some feedback we get is that it’s more manageable with the single commercial terms and there’s more ownership.”
However, Hauge notes that this approach may not always be the best decision.
“If the project is price focused, sometimes splitting up the packages is more commercially beneficial,” he said. “Plus, from a risk point of view, you may want to spread your risk across a number of packages.” 
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