If one message last week’s building permit figures made clear, it was a pick-up in non-residential building throughout Canada, led by an improving industrial sector, is now providing solid levels of support to the overall construction recovery even as demand for new condominiums drops back.
The figures show an easing in residential permit values following a tightening of financing rules for condos in July.
Thanks to yet another strong showing in the non-residential sector, however – with strong showings in Ontario, Quebec and Manitoba – overall building approvals are now at five-year highs.
Better yet, despite the lumpy nature of non-residential data, the rise in approvals in the sector has been consistently sustained during recent months, meaning there has been a discernible upward trend in the volume of new projects coming through.
Indeed, at $16.8 billion, the overall value of permits issued for non-residential construction in the six months to October (seasonally adjusted) was well above that for both the six months prior to that ($14.8 billion) and the six months to October last year ($15.6 billion).
The uptick in permits has primarily been concentrated within the industrial area.
Furthermore, these figures, which relate only to buildings, fail to adequately reflect the strength of activity in civil construction driven by the huge volumes of investment going into oil and energy exploration.
Over the long term, investment in oil sands is expected to generate up to 880,000 person-years of construction industry employment in provinces such as Alberta, British Columbia and Prairies over the next 25 years, according to a recent report from the Conference Board of Canada.
Activity in residential building, meanwhile, is expected to ease back next year in virtually all main provinces except for British Columbia, which is experiencing strong employment and population growth.
