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New data illustrating the weighting of infrastructure in construction illustrates the driving force that infrastructure has provided to construction industry growth in 2010 and 2011. Accounting for a high portion of net output, infrastructure construction has pushed Canada ahead of other developed countries. Over the short-term, we anticipate Canada to remain the most attractive developed market from a construction industry growth point of view, moving into a stable growth trajectory of around 3.7% yearon- year on average between 2012 and 2016.

Key Growth Drivers:

• Infrastructure investments totalling around US$100bn are currently underway and in the pipeline in Canada. This is split relatively evenly between transport and energy & utilities, with power plants and transmission grids having a particularly strong pipeline, equal to half the total expected investment. Railways are also expected to exhibit strong growth, driven by a large number of urban light railways in the planning stages.

• The strength of the PPP sector in Canada has allowed it to outperform other developed markets, as private capital investment into the sector has been sustained, due to the strength of the local debt markets compared to the crisis-ridden financial sector in other developed countries. The PPP market is expected to continue to be dynamic over the medium-term, with social infrastructure especially benefitting from this procurement model. In September 2011, there were 73 PPP projects either in the construction or pre-construction phase, according to the Canadian PPP Council.

• A huge development plan was announced in May 2011 which would open up significant investment potential in Quebec. The ambitious CAD80bn Plan Nord, aimed at developing Quebec, was unveiled by Quebecs Premier, Jean Cherest. The plan will support the expansion of the regions mining sector and promises to transform northern Quebecs economy, by creating 20,000 new jobs, overseeing economic and social infrastructure improvements, and bolstering state coffers through royalties. However, the plan must be viewed within a political context.

With Jean Cherests Liberal Party looking shaky ahead of the 2012 provincial elections, many have dubbed it a ploy to appease voters and secure the premiers legacy. BMI notes that despite major fanfare in announcing the huge development plan, the likelihood of it being implemented in any comprehensive manner, at least in the short-term, is slim.