CanaData’s construction starts statistics in first-quarter 2008 versus first-quarter 2007 were decidedly weak. Grand total starts (i.e., residential, plus ICI, plus engineering) for the country as a whole were -25% in square footage and -18% in dollar volume. Furthermore, every construction category showed a downturn, some considerably steeper than others.

So far this year, total Canada residential starts have been -23% in square footage and -24% in dollars versus the same period last year. The “singles” market (-10% in units) is consistent with what Canada Mortgage and Housing Corporation (CMHC) has been saying. However, CanaData’s “multiple-unit” starts (-41% in units) have declined so far this year versus CMHC’s increase of nearly one-third. CanaData may have recorded the starts at an earlier point in time. For all of 2007, CanaData had multiple-unit starts at +16%, whereas CMHC’s figure was only +3%.

Total non-residential building (ICI) work has been -28% in square footage and -19% in dollars year to date, according to CanaData. The smallest decline among the ICI sub-categories has been recorded by commercial work (-18% in square feet and -5% in dollars).

The institutional (-41% in square feet and -33% in dollars) and industrial (-58% in square feet and -54% in dollars) categories were quite soft. Total engineering construction starts were -6% in dollar terms.

In summary, one has to look hard to find encouraging numbers in the latest set of statistics. The only categories and regions where there have been significant increases were commercial work in Alberta and engineering activity in Manitoba and British Columbia. The latest building permit figures from Statistics Canada also show a marked falling off. It appears that concerns about the cross-border impacts of U.S. slowdown/recession have put a halt, hopefully temporarily, on capital spending plans.

As for the ten largest project starts in March, Alberta was the most active province with four. Ontario and British Columbia accounted for three projects each. By type of structure, the engineering and commercial categories accounted for three projects each and commercial and institutional work provided two projects each. (The Top 10 starts list for March 2008 appears in RCD’s Market Insights website channel.)

The “12-month moving total” trend graph shows ICI work easing for the second month in a row, after a long upward climb that began in early 2005. The engineering trend line remains high, with a slight jog upward in the latest month.

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

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