There has been more good news for the building and construction sector with the latest data showing non-residential building activity at close to three year highs.
According to Statistics Canada, the seasonally adjusted value of non-residential building construction throughout the country increased by a healthy 1.8 per cent in the June quarter to come in at $11.181 billion – the second highest level on record for the past three years.
Leading the way are the commercial and industrial sectors, where spending for both sectors is at its highest level in at least three years. Conversely, activity is quiet in the institutional sector as work on public sector projects drops back.
In terms of regions, Ontario, Alberta and Quebec were the standout performers while New Brunswick, Prince Edward Island and Newfoundland and Labrador experienced declines in activity.
The latest data confirms that conditions in the Canadian construction industry are reasonably good at present.
Furthermore, forward looking indicators are encouraging, with four consecutive months (to May) of strong readings in non-residential building permit data suggesting that the pace at which new work is coming in has picked up.
To be sure, however, there are clouds on the horizon.
For one thing, in the residential sector, recent building permit and new house price data indicates strong demand for housing but there are concerns about overbuilding in some segments of the market, particularly in the area of newly-built condominiums in Toronto.
Also, some commentators expect economic activity to remain subdued in the near term due to the weakening global economy, though Bank of Canada governor Mark Carney remains confident the nation’s economy can maintain moderate rates of growth for the next two years. Any slowdown would affect demand for commercial, retail and industrial space.
Such fears continue to be underlined as other data released earlier this week showed the fourth consecutive monthly decline in manufacturing sales.
Still, the latest construction numbers can only be read as yet another positive for the industry. For now, at least, conditions in the Canadian building industry are better than just about anywhere else in the developed world.
