CanaData’s construction starts statistics remained down by about one-fifth on a year-to-date basis in October 2008, versus the same period in 2007. Grand total starts (i.e., residential, plus ICI, plus engineering) for the country as a whole were -22% in square footage and -18% in dollar volume, partly due to uncertainty about the economic outlook.

Through October of this year, total Canada residential starts were -20% in square footage and -14% in dollars, versus the first ten months of last year. Unit starts are also down by 18% overall, with not much difference between singles/doubles (-16%) and multiples (-20%). CanaData’s figures on multiples are more pessimistic than government numbers, perhaps because of an earlier reporting of starts on a number of major condo projects.

According to CanaData, year-to-date total non-residential building (ICI) starts are negative to about the same degree now as they were a month ago. Through October of this year, they stand at -26% in square footage and -28% in dollars. The comparable figures after September 2008 were -26% and -22% respectively.

Neither private sector nor public sector work has performed particularly well this year. Institutional starts are -27% in square footage and -24% in dollars. Both hospital projects and educational facilities are off by about one-quarter, in terms of square footage. The only major institutional category with an increase so far this year has been defence and law enforcement, ahead by about 50% in square footage thanks to a major remand centre in Edmonton.

Commercial starts are now down 27% in both square footage and dollars year to date. Private office buildings are a particular disappointment (-41% in square feet). Some major office building starts in Calgary and Toronto this year have not matched the exceptional level of starts last year (“The Bow” in Calgary and “Bay-Adelaide” in Toronto). Retail starts in square feet have declined by about one-quarter and warehouse starts have fallen back by more than one-third. Only the hotel and motel category (+4%) has kept up with last year and this does not include some large projects that have been categorized as “residential” because the majority of units are condos rather than rental suites. This includes the large-project start on the Shangri-La tower in Toronto in the latest month.

Industrial starts are down by a relatively small percentage (-12% in square footage) but the total volume, both last year and this year, remains low. Engineering starts have bounced back somewhat. They are now only -13% in total dollars versus a more significant drop-off earlier this year. It has taken some time to dampen the effect of a huge hydroelectric project start in Québec last year.

Some engineering categories are doing quite well. Provincial infrastructure spending to upgrade structures and make them safer has caused bridge starts to nearly double this year versus last year. Sewer and watermain work is about even with last year. Road and highway starts are +5%. Anthony Henday Drive work in Edmonton, at an estimated $1.4 billion, was the largest project start among all categories in October.

What about the ten largest project starts in the individual month of October? Québec, Ontario and Alberta accounted for three each, with B.C. providing the tenth. By type of structure, the weighting was top-heavy in the engineering category, with seven out of 10.
The Top 10 starts list and the Trend Graph (on total starts) appear on Reed Construction Data’s Market Insights website channel.

Notes: CanaData’s construction starts are made up of new, addition and alteration work. There are dollar and square footage figures for new and addition work, but not for alterations.

The type of structure breakdowns are residential, non-residential building (also known as ICI to correspond with industrial, commercial and institutional) and engineering. These are all recorded in both dollars and square feet, except for engineering work (e.g., roads and highways, pipelines, electricity projects, etc.), where only dollars make sense.

CanaData, a statistics-gathering and forecasting product line of Reed Construction Data, calculates starts based on RCD’s extensive tracking of projects through all stages of construction.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.

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