CanaData’s construction starts statistics through April 2009 remain quite depressed. Total square footage in all categories of construction − residential, ICI and engineering − is -52% year to date versus the first four months of last year. The dollar volume of starts is -30%. That being said, however, an interesting pattern has emerged within the type-of-structure categories and it shows up most readily in the Top 10 starts list for the month.

Nine of the top 10 construction project starts in April were either engineering or institutional work. Six were the former and three were the latter. Only one project came from another category and that was a 32-storey residential tower in British Columbia. The Top 10 and trend graph have been posted and can be accessed by clicking here.

Privately-funded Work Dries Up; Public Sector Steps Forward

This is a remarkable configuration. It clearly demonstrates what is happening in the marketplace. Privately-funded work in such areas as office buildings, retail stores, warehouses and manufacturing plants has dried up. The recession, job losses and lack of credit have stopped construction plans. But the public sector is stepping up to the plate. As promised in nearly every budget, infrastructure spending is being pushing forward.

Engineering work, so far, has been mainly sewage and water treatment plants. These kinds of projects are proceeding in Saint John NB, Brampton and Leamington ON, Neepawa MB and Saskatoon SK. Municipalities are proceeding with this work with or without firm cost-sharing commitments from the other two levels of government. Some of the work is proceeding on speculation that the money will be forthcoming later.

Two of the large institutional projects are in British Columbia and are hospital additions, in Kelowna and Vernon. The other major institutional job is the start on the Canadian Museum for Human Rights in Winnipeg, Manitoba. This project’s launch is the fulfillment of a dream by the Asper family, one of the giants in Canadian publishing.

Percentage Change by Type of Structure

Due to the foregoing mix of work, institutional construction is the only category to show a year-over-year increase in starts (+1% in square footage and +56% in dollar volume). Industrial starts have been weakest so far this year (-71% in square footage and -78% in dollars), with commercial also down substantially (-67% in square footage and -51% in dollars). By comparison, engineering starts have performed okay (-16% in dollars).

This is a pattern that is likely to continue as the rest of the year unfolds and as government infrastructure spending gains more traction. Regionally, the only province that is standing apart, with a better record than the rest, is Manitoba (-14% in square footage and +58% in dollars). Almost all of the others have dropped by half or more. The three western-most provinces are down by around 60%. The fall in commodity prices since last July has caused investment spending to be slashed in those resource-dependent regions. Ontario and Québec starts are also weak, but not to quite the same degree.

Alex Carrick