Construction activity should remain one of Canada’s top industrial performers through 2005, led by homebuilding and renovations, according to economists at Bank of Nova Scotia.

The Canadian Construction Outlook, released today by Scotia Economics, says construction activity should advance at an inflation-adjusted 5% this year and next, about double the pace of national output growth.

“The construction industry has become an integral part of Canada’s economic landscape, accounting for about one-quarter of real GDP growth over the past three years, even though it represents just a little over 11% of the total economy,” said Aron Gampel, Scotiabank’s deputy chief economist, in a release.

“This relative out-performance reflects a hefty production multiplier, where a sizeable share of the Canada’s labour and products are sourced domestically.”

He cited fundamentals underpinning construction, including current low borrowing costs and public-sector building expenditures.

From a sectoral perspective, residential construction is expected to grow at an average annual rate of 6% through 2005.

Growth in the commercial sector is targeted at around 4% on average over the next two years. On the industrial side, expansions are getting a boost from the resource sector, especially in the oil and gas and metals areas where projects are encouraged by rising prices and demand.