Rebalancing the Landscape: Future Trends in Canada’s Nonresidential Construction Market
ConstructConnect’s latest forecasts reveal a transformative period ahead for Canada’s nonresidential construction market between 2025 and 2027. While a modest contraction of 0.8% is projected—from $88.2 billion in 2025 to $87.5 billion in 2027—the overarching narrative is one of rebalancing rather than decline. With significant shifts in sector dynamics, professionals in construction must remain attuned to emerging trends to navigate this evolving landscape successfully.
The Rise of Civil Construction: A Key Growth Driver
Civil construction is poised to become the cornerstone of Canada’s construction market, achieving an impressive growth trajectory projected at 25.9%. Moving from $32.6 billion in 2025 to a record $41 billion by 2027, this sector’s expansion signifies a robust commitment to infrastructure investment across the nation.
Activity in civil construction is expected to follow a two-phase pattern: a measured growth in 2025 followed by a surge in momentum in subsequent years. With anticipated starts set to rise 15% to $37.5 billion in 2026 and an additional 9.3% in 2027, infrastructure projects are not just maintaining momentum—they’re setting new benchmarks for forthcoming construction activities.
By 2027, the civil construction sector’s market share is expected to climb to 46.9%, reflecting a clear national priority for infrastructure investment, supported by policies such as the newly introduced Building Canada Act. This strength marks a notable departure from traditional operational ranges, where civil construction historically lingered between $28 billion and $38 billion.
Adjustments in Industrial and Commercial Sectors
While civil construction flourishes, both the industrial and commercial sectors face significant corrections following periods of unprecedented growth.
Industrial Construction: Transitioning from a Historic Peak
Canada’s industrial construction sector, after experiencing a surge to nearly $27 billion in starts spending in 2024, is set for a normalization phase. Projections indicate a notable decline of 34.5% in starts—falling from $16.6 billion in 2025 to $10.9 billion by 2027. Although this adjustment may appear alarming, it brings the sector back in line with pre-2024 levels.
Commercial Sector: Correcting Course Post-Volatility
The commercial sector, encompassing diverse spaces like offices and parking garages, is on the brink of the most significant adjustments. With a forecasted contraction of 46.6% between 2025 and 2027, activity is anticipated to decrease sharply from a high of $9.4 billion in 2025 to just $5.0 billion by 2027. Much of this decline will be concentrated in the following year, with a staggering 45.7% drop to $5.1 billion anticipated by 2026.
This correction not only signals a return to historical averages but also reflects changing market sentiments, as the commercial sector’s share of total nonresidential starts is expected to decrease from 10.7% in 2025 to 5.8% by 2027.
Stability from Institutional Sectors
Amid the significant shifts, Canada’s institutional sectors, including medical, educational, and community construction, are poised to provide a steady foundation for growth and stability.
Sustaining Medical Construction
Medical construction remains robust, projected to maintain high levels of activity with starts around $14.6 billion in 2025 and $14.5 billion in 2027. A minor fluctuation of just 0.5% signifies a sustained commitment to healthcare infrastructure, anchoring it as the second-largest nonresidential segment in Canada.
Educational and Community Construction
In addition, the educational construction sector is set to grow steadily, reflecting an anticipated increase of 6.3% from $6.4 billion in 2025 to $6.8 billion in 2027. Community construction is on a parallel track, predicted to rise by 15% from $3.6 billion in 2025 to $4.1 billion in 2027. These sectors aim to balance the volatility seen in the industrial and commercial areas, supporting a diversified and resilient construction economy.
Navigating the Future of Canada’s Construction Market
Canada’s construction landscape is in a transformative phase, marked by a strategic rebalancing among various sectors. The anticipated growth in civil construction stands out as a beacon of opportunity, promising stability amidst anticipated declines in the industrial and commercial realms.
Construction professionals must leverage these insights and trends for strategic positioning. As the market stabilizes, sectors such as medical, educational, and community construction will emerge as reliable pillars, paving the way for comprehensive growth across the industry.
In conclusion, while fluctuations are inherent in the economic cycle, the forecasted shifts articulate a compelling vision for the future of Canada’s nonresidential construction market—one that begins to embrace balance and forward-thinking investment.
Devin Bell is the associate economist at ConstructConnect, where he closely analyzes the construction economy to provide insights that support industry stakeholders.
