May 21, 2008
Economy at a Glance — May 22, 2008
Canada’s construction starts fail to keep up through April
CanaData’s construction starts statistics through the first four months of 2008 remained significantly down versus the same period in 2007. Grand total starts (i.e., residential, plus ICI, plus engineering) for the country as a whole were -19% in square footage and a similar -18% in dollar volume.
Through April of this year, total Canada residential starts have been -18% in square footage and -18% in dollars, versus January through April of last year. These are almost exactly the same percentages of decline as for total starts. In other words, the residential market has had a neutral impact on Canada’s total starts so far this year.
Total non-residential building (ICI) work has been -22% in square footage and -13% in dollars year to date, according to CanaData. These are slight improvements versus their month-ago levels. The smallest declines among the ICI sub-categories have been recorded by commercial work, in terms of square footage (-16%) and dollars (-2%), but both measures have shown only minor improvements versus a month ago.
The institutional (-23% in square feet and -21% in dollars) category has fought back a little from even lower numbers last month, thanks mainly to one large project. Year-to-date industrial volumes (-58% in square feet and -50% in dollars) are little changed compared with March. Total engineering construction starts (-23% in dollar terms) have dropped significantly versus where they were after the first quarter (-6%).
By way of comparison, construction starts in the U.S. (-22.0% in dollar volume) are down to a quite similar degree as in Canada, year to date through April versus the same period last year. However, the U.S. decline is more heavily weighted in residential work (-38.4%). The commercial (-11.9%) and industrial (-47.2%) categories have had dollar-volume declines similar to what has happened in Canada. Institutional (-1.2%) and engineering (-11.2%) work in the U.S. have been significantly less negative.
As for the ten largest project starts in April, Ontario was the most active province with four, while Alberta had three, Québec had two and British Columbia contributed one. By type of structure, the commercial and engineering categories accounted for three projects each and residential and institutional work provided two projects each.
The largest individual building project in the month was the $240 million, 1.7 million square-foot remand centre (i.e., prison) going up in Edmonton, Alberta. Also notable was the 700,000 square foot Ritz-Carlton hotel/condominium project in Toronto. The largest engineering project was a $400 million cogeneration electric power plant for which ground has been broken in Thorold, Ontario, between St. Catharines and Niagara Falls.
The “12-month moving total” trend graph shows both ICI and engineering work maintaining what have been essentially flat levels since about mid-2007. However, these plateau figures are at relatively high levels and that is good news.
For more articles by Alex Carrick on the Canadian and U.S. economies, visit his blog and Market Insights.
Trend Lines of Construction Starts in Canada - April 2008
Moving Totals of the Latest 12 Months* (CanaData Figures)
*For example, the April 2008 figure is the sum of the monthly figures for May 2007 through April 2008.
ICI is the sum of industrial, commercial and institutional.
Data source and chart: Reed Construction Data - CanaData.
