March 16, 2010
Economy at a Glance
CanaData’s February year-to-date construction starts a mix of pluses and minuses
ALEX CARRICK
Chief Economist, CanaData
CanaData’s construction starts statistics for buildings are in a lot better shape through February of this year than they were through the first two months of last year. In fact, they are 51% better.
That’s the percentage increase for the square footage of residential starts and, by coincidence, it is also the percentage increase for the square footage of non-residential building starts.
The 51% gain figure is a mix of sub-sector results, however. In the residential category, the square footage (+61%) of singles and doubles (which are tied to Canada Mortgage and Housing Corp.’s housing starts) is ahead by more than multiples (+21%). In non-residential buildings, commercial starts are flat versus early 2009, institutional work is +161% and industrial is -60%.
Engineering starts are only recorded in dollars (e.g. sewers don’t have square footage). On that basis, they are -51% year to date versus the same period last year. Included among last year’s early starts was the Meadowbank gold mine in Nunavut. The year-over-year decline in engineering starts has had little impact on the 12-month moving trend curve (see accompanying graph), due to the strength throughout last year. However, the decline in engineering starts so far this year has caused CanaData’s total starts in dollars to fall 5% versus January-February 2009.
The pattern of starts early in this new year remains largely the same as last year, with publicly-financed work doing the heavy lifting. Privately-financed projects, with the exceptions of some high-rise condominium towers and oil projects, continue to be most noticeable by their absence.
In January 2010, eight of the top 10 project starts were either institutional or engineering. In February, the proportion wasn’t quite as high, with six of the 10 largest projects being institutional or engineering. However, two of the remaining four projects were types of commercial work that are meant to serve government by providing administrative offices.
The February Top Ten starts list contains more Ontario projects – specifically seven out of the 10 – than have been seen in most months lately. The four major institutional projects getting underway in the province include a correctional facility, a University of Toronto instructional centre and two health care facilities. There was also a start on a high-rise condo tower (46 storeys) at the corner of Yonge and Harbour Streets. Ontario’s one large engineering project start was a water pollution control plant (Duffin Creek) in the Regional Municipality of York.
In the rest of the country, the large project starts consisted of a government scientific complex (by SIQ) in Quebec City, a 13-storey residence at the University of Manitoba (Pembina Hall) and Trans Canada Highway twinning in Banff National Park, Alta. (by Parks Canada).
For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog. His lifestyle blog is at www.alexcarrick.com
(CanaData figures)
Data source and chart: Reed Construction Data – CanaData.
