Industry welcomes resurgence in non-residential projects
Michael McCullough
Sun
CREDIT: Stuart Davis, Vancouver Sun Construction worker Richard Aumueller of Coquitlam is employed by the construction firm Stuart Olson. Vancouver is breaking non-residential construction records.
Non-residential building construction is taking off in Greater Vancouver after a long lull.
The city experienced the biggest increase in non-residential building construction of any major city in Canada during the first quarter, Statistics Canada reported Monday. Investment in commercial, industrial and institutional buildings rose by $29 million, or 7.5 per cent, to $409 million in the January-March period compared to the last quarter of 2004.
Around B.C., non-residential investment climbed a more modest 1.6 per cent to $711 million in the first quarter, dragged down in part by a 33-per-cent drop (to $44 million) in Victoria, StatsCan said.
Institutional construction was the largest contributor to the growth, both in Vancouver and the province in general, at a time when other provinces were cutting back their public projects.
“British Columbia stood out with the strongest investment growth (up 5.2 per cent to $186 million) in the first quarter as a result of investment in health-care facilities,” the agency said. In Greater Vancouver, institutional investment was up 12.8 per cent to $97 million.
But the strong showing may be at least partly due to timing.
“We’re coming off a trough,” said B.C. Central Credit Union economist David Hobden, whereas “the rest of Canada is coming off a high period. It makes Vancouver look good.”
Nonetheless, Hobden thinks this is just the start of a longer-term upswing.
“We are forecasting continued growth in non-residential investment through 2009,” he said. He attributes very little of the construction activity to the 2010 Olympics, but rather to the business cycle.
In its weekly economic briefing, the credit union noted the increase in non-residential building permits over the past 12 months, much of it coming from industrial plants, recreation, warehouse and office buildings and government-built social housing. Hotel, restaurant and school construction, by contrast, was down.
“While the actual value of non-residential building permits is normally volatile from month to month, the trend has been rising for all three major classes of structures [commercial, industrial and institutional] since mid-2004,” the briefing said.
“We’re forecasting a 15-per-cent gain this year, led by capital spending on government buildings,” Hobden added in an interview.
Vancouver Regional Construction Association president Keith Sashaw said the turnaround became noticeable midway through 2004, long after the turning point in housing construction.
“What we are seeing is a very strong resurgence,” he said, after a slow period for both residential and non-residential building between 1994 and 2000.
Sashaw rattled off a list of major projects including the Vancouver Convention & Exhibition Centre expansion, construction at the University of B.C., airport expansion, and an ambulatory care project at Vancouver General Hospital.
THE OTHER BUILDING BOOM:
Home construction has been barrelling along in B.C. but now non-residential building is on a solid upward trend as well.
$177 million: Value of non-residential building permits in B.C. in February
$166 million: Value of non-residential building permits in B.C. in January
Increase: +$11 million
Source: Credit Union Central B.C.
While investment in non-residential construction was up in 17 of 28 metropolitan areas in the first quarter, Vancouver showed the largest increase.
Investment in non-residential construction, Q4 2004-Q1 2005
Vancouver:
+$29 million
Edmonton:
+$21 million
Calgary:
+$18 million
Winnipeg:
+$6 million
Toronto:
+$12 million
Montreal:
+$19 million
Halifax:
+$2 million
Source: Statistics Canada
© The Vancouver Sun 2005
