In the first two months of 2008 versus the same period in 2007, grand total construction starts (i.e., residential, plus ICI, plus engineering) in all of Canada, according to CanaData, have been -15% in square footage and -19% in dollar volume. However, this masks considerable variation within the individual sub-categories of construction.

So far this year (January-February 2008), total Canada residential starts have been -22% in square footage and -20% in dollars, versus the same period last year. There should be improvement in these numbers next month, however, since Canada Mortgage and Housing Corporation (CMHC) recorded a strong level of housing starts in the latest month.

Total non-residential building (ICI) work has been +3% in square footage and +2% in dollars year to date. The leader among the ICI sub-categories is commercial work (+28% in square footage). There have already been starts on four million square feet of private office buildings so far this year, mostly occurring in Alberta.

Institutional starts have been down a little (-16%), despite strong hospital activity. Industrial work has been really weak (-63% in square feet), but this is no surprise, given the problems faced by the export-dependent manufacturing sector as a result of the U.S. economic downturn and the high-valued Canadian dollar.

Total engineering construction starts are -48% in dollar terms. However, this is a “lumpy” category where percentages can change quickly dependent on individual large projects.

As for the ten largest project starts in February, one was in Québec, five were in Ontario and two were initiated in both Alberta and British Columbia. There was a good mix between the type-of-structure categories, with a slightly higher weighting going to high-rise residential projects. (The Top 10 starts list for February 2008 appears in RCD’s Market Insights website channel.)

The “12-month moving total” trend graph shows ICI work continuing its mild ascent that began in early 2005, while the engineering line has flattened out.

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, for industrial, commercial and institutional) and engineering. These are all recorded in both dollars and square feet, except for engineering (e.g., roads and highways, pipelines, electricity projects, etc.), which only makes sense in dollars.

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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