StatsCan report finds this province has recorded steepest decline
Derrick Penner
Sun
In B.C. the total value of building permits, including non-residential permits, dropped by just 5.2 per cent, buoyed by a 32.8-per-cent increase in non-residential permits. Photograph by : Vancouver Sun files
Home builder Norm Couttie is busy putting up 200 condo and townhouse units in four projects around the Lower Mainland right now, but isn’t so sure what 2009 will be like.
That is indicative of the residential housing sector, which saw the value of residential building permits drop substantially in October from September, according to a report from Statistics Canada.
“We’re just like everybody else,” Couttie, president of the development firm Adera, said in an interview. “Our main job is to finish what we’ve got on the go, and when we get closer to finishing we’ll be able to look ahead and see more clearly what’s going on and make our decisions.”
Couttie said Adera “will obviously give serious consideration” to what projects will start in 2009.
Pre-sales of new homes are sluggish, said Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, and sales are what will dictate future starts.
In October, the value of residential building permits issued to contractors in B.C. fell almost 27 per cent to $428 million from September, Statistics Canada reported, the steepest decline among provinces.
In its first measure of construction intentions since the beginning of the economic turmoil, the federal data-gathering agency said the value of residential construction dropped by 7.8 per cent nationwide from September to October.
B.C. did see an almost 38-per-cent jump in non-residential permits issued in October compared with September — $435 million vs. almost $328 million — which helps absorb some of the loss, but doesn’t offset all of it.
The value of all permits issued in B.C. totalled $863 million in October, a 5.2-per-cent decline from September.
Simpson said the home-renovation sector of construction, which is expected to grow in 2009, will also absorb some tradesmen.
However, with Canada Mortgage and Housing Corp. forecasting 16,500 new housing starts for 2009, compared with an average of 19,000 starts per year over the past five years, Simpson said there is a growing concern that construction workers will see longer lags between jobs.
“As these projects are shelved, so are the jobs that normally go with them,” Simpson said.
The construction sector is already seeing rising unemployment, said Philip Hochstein, president of the Independent Contractors and Business Association of B.C.
Hochstein said the unemployment situation will become more acute by the end of 2009 as more projects that are underway now come to completion without a growing number of projects to follow them in the pipeline.
“You’re forever working yourself out of a job in construction,” Hochstein said. “That’s okay when there’s another job down the road. There just doesn’t seem to be those jobs [coming] on the residential side.”
The bump in non-residential construction will help offset some of the downturn in residential construction, Hochstein said, but not all of it.
He said pending announcements from promised provincial infrastructure spending will help the industry, which will be able to respond with competitive prices.
“In the past, [government projects] might have seen two or three bidders,” Hochstein said. “Now, there will be six, eight, nine.”
Keith Sashaw, president of the Vancouver Regional Construction Association, said moderating commodity prices are bringing the cost of building materials down, and the growing availability of labour “should make projects that were marginal before more viable.
“The industry is coming off one of the strongest and most prolonged periods of expansion that we have ever experienced,” Sashaw said, “and the underlying fundamentals of B.C. are among the strongest in North America.”
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