ConstructConnect forecasts Canada’s nonresidential construction market will undergo a rebalancing between 2025 and 2027. While total activity is projected to see a modest 0.8% contraction from $88.2 billion in 2025 to $87.5 billion in 2027, this top-line figure conceals a shift in sector dynamics and balance. The forecast, which includes actual starts data through the third quarter of 2025, reveals that civil construction expansion will offset corrections in the industrial and commercial sectors.

This period of realignment is not a signal of market deterioration but rather a normalization from recent volatility. Construction professionals who understand these trends may be better positioned to take advantage of a shifting landscape.

Civil Construction: The Engine of Market Growth
Civil construction is projected to be the driver of Canada’s construction market through 2027. The sector is forecasted to achieve 25.9% growth, expanding from $32.6 billion in 2025 to a record $41 billion by 2027. This increase of $8.4 billion is a strong driver for the entire nonresidential market, providing stability amid adjustments in other categories.

The sector’s growth trajectory shows a measured expansion in 2025 followed by accelerating momentum. Starts are projected to rise 15% to $37.5 billion in 2026 and another 9.3% in 2027. This pattern indicates infrastructure projects are gaining steam, with peak activity establishing new record levels for the country.

As a result, civil construction’s market share is forecast to expand from 37% of total activity in 2025 to 46.9% by 2027. This increasing concentration underscores a clear national priority for infrastructure investment, supported by policy like the recently introduced Building Canada Act.

Historically, the civil sector has operated within a range of $28 to 38 billion. The 2027 projection of $41 billion represents an expansion beyond established parameters, driven by investments in infrastructure projects that are expected to support growth beyond the forecast period.

Sectors Undergoing Major Correction
While infrastructure is anticipated to grow, the industrial and commercial sectors are expected to see noticeable market adjustments. This normalization follows periods of strong expansion for both sectors.

Industrial Construction Normalizes from Historic Peak
Canada’s industrial construction sector is expected to see a normalization after reaching a peak in starts spending of nearly $27 billion in 2024. Starts are projected to decline by 34.5%, falling from $16.6 billion in 2025 to $10.9 billion by 2027.

Despite these reductions, the forecasted industrial starts activity is projected to remain near pre-2024 levels.

Commercial Sector Adjusts After Volatile Starts Period
C , which includes offices, transportation terminals, parking garages, is forecasted for the most sizeable adjustment. with starts projected to contract by 46.6% between 2025 and 2027. Activity is forecasted to fall from a peak of $9.4 billion in 2025 to $5.0 billion by 2027. The bulk of this correction occurs between 2025 and 2026, when starts are expected to decrease by 45.7% to $5.1 billion.

The $9.4 billion peak in 2025 matches a previous historical high, and the subsequent decline represents a return toward the sector’s historical average. Commercial construction market share will adjust accordingly, going from making up 10.7% in 2025 of all nonresidential starts to 5.8% by 2027, reflecting its return to a more typical proportion of the overall market.
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Source: canada.constructconnect.com