June 20, 2008
Economy at a Glance - June 19, 2008
Canada's construction starts through May continue to disappoint
CanaData's construction starts statistics, year to date through May 2008, continued to disappoint versus the same period in 2007. Grand total starts (i.e., residential, plus ICI, plus engineering) for the country as a whole were -21% in square footage and -20% in dollar volume terms. By way of comparison, U.S. total starts were down to a very similar degree, -19%, during the same period of time.
Through May of this year, total Canada residential starts have been -17% in square footage and -14% in dollars, versus January through May of last year. In the latest month, however, there was a marked surge in high-rise residential projects.
Total non-residential building (ICI) starts have been -30% in square footage and -28% in dollars year to date. The smallest decline among the ICI sub-categories has been for commercial work, -20% in terms of square footage and -12% in dollars. There have been some bright lights within the commercial category, however, as hotel work is 92% in square footage and private office buildings are on a par with a strong level of starts last year.
Institutional (-43% in both square footage and dollars) starts have faltered due to a fall-off in both hospital work (-60%) and educational facilities (-40%). While also weak, industrial volumes (-46% in square feet and -41% in dollars) year to date are slightly better than they were in April. Also, total engineering construction starts (-16% in dollar terms) are not quite as negative now as they were a month ago.
As for the ten largest project starts in May, Ontario was the most active province with four, while British Columbia had three, Québec had two and Saskatchewan was home to one. By type of structure, the breakdown was residential with seven projects, commercial with two and engineering with one. Clearly, the heaviest weighting in the month was towards high-rise residential complexes.
The large condo/apartment building projects were mainly split between Ontario and British Columbia. The largest complex in Ontario will be a 38-storey tower on Sherbourne Street in Toronto. In B.C., it will be a 42-storey tower at Seymour and Granville Streets in Vancouver.
The overall largest individual project in the month was Highway 7 roadwork in Lanark County, Ontario, valued at $65 million. The largest commercial project on the list was IPSCO Place revitalization work in Regina, Saskatchewan.
The “12-month moving total” trend graph shows engineering work moving at about the same relatively high pace that it has maintained for the past year. ICI starts, however, appear to be coming off their most recent peak and are in danger of heading down again.
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 – May 2008
Moving Total of Latest 12 Months* (CanaData Figures)
*For example, the May 2008 figure is the sum of the monthly figures for June 2007 through May 2008.
Data source and chart: Reed Construction Data - CanaData.
