CanaData’s construction starts statistics remained significantly down on a year-to-date basis in July 2008, 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 -25% in dollar volume terms.

Through July of this year, total Canada residential starts have been -20% in square footage and -17% in dollars, versus January through July of last year. CanaData has calculated that multiple-unit starts (-29% in square footage) have been weaker than single- and double-unit residential starts (-15%). Canada Mortgage and Housing Corporation (CMHC) is incorporating a significant decline in unit starts this year in its latest forecast.

Year-to-date total non-residential building (ICI) starts have deteriorated a bit more versus what they were a month ago, according to CanaData. They currently stand -25% in square footage and -27% in dollar-value terms through July of this year. (The comparable figures after June were -20% and -18% respectively.)

The smallest decline among the ICI sub-categories has been for commercial work (-21% in square footage and -25% in dollars). Hotel and motel work is about the same as last year in terms of square footage. Surprisingly, private office buildings have fallen behind last year’s level of starts (-24% in square footage). Retail and wholesale services have also pulled back (-15%), as has the “warehouse and storage building” category (-41%). Only recreational buildings (+5%) are showing an improvement.

In the institutional category, education buildings and hospitals are both down by about one-quarter in terms of square footage. Medical-care buildings (i.e., seniors’ homes) are off by about two-thirds. On the plus side, defence and law enforcement buildings have doubled in square footage so far this year versus the same time frame last year. The net result is that institutional starts are -30% in square footage and -20% in dollar value.

Industrial starts in square footage are down by a little more than one-third, but it is the dollar figure that is showing the largest decline (-68%). The manufacturing sector has been hurt by the increase in value of the Canadian dollar and the loss of export sales to the U.S.

Engineering work is off by 30%, which is not that bad considering that last year’s dollar volume included a start on a huge hydroelectric project in Québec. It is interesting to note that the important “roads” category is about even with last year and sewer and watermain work is actually ahead of January to July in 2007, so far in 2008.

As for the ten largest project starts in the individual month of July, Ontario was the most active province with six, British Columbia had two and Québec and Alberta accounted for one each. By type of structure, the breakdown was engineering with five, residential with four and institutional with one.

The “12-month moving total” trend graph has been showing a dip in the ICI category over the past several months. The engineering line has also veered down in the past two months, ever since Quebec’s Eastmain hydroelectric project, started in June of last year, dropped out of the moving twelve-month total. (The Top 10 starts list and the Trend Graph 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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