Although institutional construction spending intentions (building permits) eased slightly in August — -1.1% month over month compared to July — they were up almost 20% on a year-to-date basis.

Based on this increase, it now appears institutional construction spending for the year as a whole will be considerably stronger than the 14.8% year over year reported in the mid-year Capital Expenditure Survey carried out in mid-2009 and almost twice the 14.8% increase reported in a survey done in late 2008 and early 2009.

Across the four major categories of institutional construction, year-to-date planned spending on government buildings is up just over 40%. Meanwhile spending on health care facilities is up by 29.7% and spending on schools, colleges and universities is up by 20.4%. Compared to 2008, year-to-date spending on construction of medical/welfare buildings is down 11.2%

From a regional perspective, institutional construction in Manitoba is up 161% year to date, in large part due to increases in spending on health services projects such as the Western Manitoba Cancer Centre and on educational buildings such as the College Universitaire de Saint-Boniface expansion.

In British Columbia, institutional construction spending is up an estimated 96.5% year to date in part due to additions to the fleet maintenance facility in Esquimalt, the RCMP headquarters relocation project in Surrey and the Alberni District Secondary School.

In New Brunswick, institutional construction intentions are up 73% year to date in part as a result of plans to construct a new justice facility in Moncton and to expand the University of New Brunswick’s fitness centre.

In view of the fact that the shovels of the “shovel ready” projects announced by the federal government at the beginning of the year are just starting to move earth, institutional construction spending should gain momentum through the remainder of 2009 and this momentum should persist through 2010.