Earth-Moving Contractors Prepare for a Strong 2025

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Earth-Moving Contractors Prepare for a Strong 2025

January 24, 2025

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Canada's heavy construction sector is one of the mainstays of our economy, and because it occurs early in many building cycles, it serves as a leading indicator for large-scale projects in mining, energy, and commercial construction. Consequently, there is much riding on the timely and successful completion of their work, calling for strong abilities to execute when called upon.

Our role at SMS Equipment is to work as a collaborative growth partner with our customers, helping them plan ahead to meet sudden demand surges, and providing flexible procurement and financing options to keep their equipment strategy closely aligned with changing business conditions.

Here are some of the trends we will be watching.

Growing Demand in 2025

2025 promises to be a strong year for pending projects moving past the preconstruction stage. According to an analysis by software firm ConstructConnect, as much as $171 billion in large projects could become active this year, a sharp improvement over the $50 billion for 2024. On the domestic construction side, pent-up demand for housing is expected to drive construction starts in single and multi-family dwellings and supporting infrastructure.

In a 2025 forecast, the Business Development Bank of Canada (BDC) projects that Canada's lower interest rates will make projects more attractive to investors. The optimism, however, comes with a caveat – tariff threats from the U.S. could throw markets into uncertainty.

Government Programs

With a federal election pending in 2025, there is an expectation that a number of government-funded infrastructure projects will be released. The Investing in Canada Plan, initiated by the Canadian Government in 2016, will be leveraged to support infrastructure projects such as rebuilding sections of the Trans-Canada Highway and several transportation projects in Vancouver, Toronto, and Montreal.

In mining, the Critical Minerals Strategy, a federal government program, will accelerate the early development of start-up mine sites aimed at increasing the production of lithium, nickel, and gold.

Sustainability Concerns

Sustainability continues to be a top priority for project owners, and 25% of upcoming projects will be green, according to Canada Green Building Council estimates. Many government projects now have green construction requirements, and that number is expected to grow.

There are also strong movements in the private sector. According to assessments by Climate Engagement Canada, a finance-led initiative that promotes progress on climate change, some large companies are beginning to align their capital spending with their decarbonization targets.

Labour Shortage

The difficulty of attracting people to work in construction, particularly when the sites are subjected to harsh conditions, has been an ongoing challenge for heavy construction for many years. According to On-Site Magazines 2025 Industry Outlook, the shortage has intensified as 30% of the workforce nears retirement. Furthermore, the Government of Canada is projecting a 0.2% population decline in 2025 and 2026.

Government training and apprenticeship programs, such as Alberta Apprenticeship and Industry Training, are helping fill the gap, but more needs to be done to help contractors meet the upcoming demand. Additionally, contractors will have to leverage labour-saving technology such as Komatsu's SMART Construction technology to maximize their skilled operators' productivity.

At SMS Equipment, we believe diversity strengthens our teams and drives success. Many of our talented team members have come from unexpected paths, including women who may not have initially envisioned careers in construction. These roles offer rewarding, well-paid opportunities, and everyone in the industry must collaborate to share this message widely.

Construction Goes Digital

The industry continues to go digital, with more companies developing their capabilities in BIM modelling, drone-powered site surveys, augmented reality, proximity detection and other safety technology, and autonomous and semi-autonomous equipment. While the transition is significant regarding expertise and worker buy-in, steady progress is needed for contractors to remain competitive with this global trend.

Contractors will need smart equipment to leverage this technical infrastructure. SMS Equipment serves a unique role here, as we are not just a supplier of Komatsu SMART construction technology, but a fully equipped systems integrator capable of specifying and installing digital upgrades, building multi-vendor data networks, and training customers to use the new systems.

Partnering for Progress

With the many variables facing heavy construction coupled with the challenges of bringing production capacity up to speed, no contractor wants to be caught unprepared for a large project. SMS Equipment serves as a collaborative partner, helping to ready equipment for operation, provide needed upgrades in a timely fashion, or help develop flexible procurement plans to match uncertain conditions. Your success is our success.

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