Edmonton plummets nearly 30 per cent from a month earlier

vista

Edmonton plummets nearly 30 per cent from a month earlier
6 U4 f& @) B( L, }" o' W
By Bill Mah, The Edmonton Journal; with files from Canwest News ServiceApril 7, 2009Comments (1)
* F* R  Q" r7 K. H! [1 z  StoryPhotos ( 1 )

  A crane lowers the finished roof onto a new home under construction near 215th Street north of 45th Avenue.Photograph by: Bruce Edwards, The Journal, The Edmonton Journal; with files from Canwest News ServiceCanada saw a big decline in February for building-permit values, but Edmonton fared nearly twice as badly, with the city's census metropolitan area posting a 29.8-per-cent drop from the previous month.

Statistics Canada reported Monday that building-permit value in the Edmonton region fell to $166.2 million in February, from $236.7 million in January.

That was an even bigger fall than the decline nationally, where the values tumbled 15.9 per cent to $3.7 billion. Most economists had expected a national decline of between 3.5 per cent and four per cent, following a drop of six per cent in January.

3 V3 O9 `& x4 e) NThe pace of building activity is seen as a key economic indicator.
9 p! G6 s5 G1 y) f; T
"This is a weak report and further suggests that the pace of building activity has come against pretty strong economic headwinds over the past few months, as growth has been under pressure," said Ian Pollick, economics strategist at TD Securities. "And as the correction garners momentum, the pace of construction activity will likely continue to moderate in the near term."

Alberta also saw building-permit values fall, dropping 11.2 per cent to $509 million in February, from $573.2 million in January.

6 N" d! g' Z0 s' `1 I  pThat's 66 per cent below Alberta's building permit values of February 2008 and marks the lowest value since September 2004.

+ q  T; n, a. p- J; m6 l. ]4 RGovernment stimulus spending on infrastructure has yet to make a sizable impact on building-permit values, said ATB Financial senior economist Todd Hirsch.

"This will probably change in the latter part of 2009 as some projects get underway," Hirsch said.

"Even though the stimulus cash is targeting the 'shovel-ready' projects, it is very difficult to get those projects underway quickly."

A 22.5-per-cent drop in non-residential construction dragged down Alberta's building-permit values. Meanwhile, residential building permits rebounded by seven per cent -- the value of multi-family units rose while single-detached units fell.

Despite February's slowdown, Hirsch said Alberta's rate of activity is still better than the national average.
4 F! G/ P3 L1 l& j
# l: H$ X0 o2 h; a& E$ G! ?"There is $140 worth of building permits per person in Alberta, while the national average is only $110. In Ontario -- the province being hit hardest by this downturn -- building permits are only $96 per person."
" U$ y& m- L$ p  e
) `) V/ V; G3 S# I* }" LIn fact, leaner building-permit values may be a blessing to Alberta's economy, Hirsch said.
# M, H2 ~9 T. ]* B
"Not only is this construction slowdown normal, it is taming the feverish pace of activity that was largely responsible for driving construction costs sky-high."
  z. ?  v8 N" ~
Ken Gibson, executive director of the Alberta Construction Association also downplayed Alberta's slide in building permits.
  R2 N- \1 _0 H0 T2 N
"In the case of non-residential projects, the value of building permits can fluctuate greatly from month to month, depending on the size of each individual project," he said.
& p( q. f( R# C2 e
"Nevertheless, there does seem to be a bit of a lull from the record levels of activity we have seen in recent years."
; \& {! E, I1 c) ^3 N
He suggested developers now have a window where once-scarce construction workers are available for work.
- }( Y. b; q3 ~2 [1 r
" y0 H5 B& m$ |7 B"Workforce forecasts for the industry suggest a return in the near term to tighter markets due to an aging workforce combined with a recovery in oil prices. It's a great time to purchase construction services."
* d% {0 Z6 R" o0 v1 Y5 z( J
Calgary, meanwhile, bucked the national trend as its census metropolitan area saw an 11.8-per-cent

increase from the previous month to $195.9 million in February, from $175.2 million in January.
' y5 V) v4 o' V7 j9 z5 S( Y
: u* j5 Z1 c5 [3 h, n9 JHirsch said the difference between Edmonton and Calgary could be based on applications for large projects swinging the numbers.
$ n; m+ L5 o8 K- P' `( d' E
! s6 J- \; u4 y8 e2 w"Bottom line: I really don't think there is anything other than timing that is making Edmonton and Calgary numbers move in opposite directions," Hirsch said.

: _+ q3 b" B; o9 }3 j3 gOn a national level, in the non-residential sector, the value of institutional building permits fell 56.4 per cent to $363 million in February, compared with a 64.2 decline the previous month.
7 ~  {2 D( F0 M) O( ~  |
+ g, V1 c( o' ?$ G' i3 n* ^"The decrease came mainly from construction intentions for medical buildings in Ontario and Quebec and a decline in permits for educational institutions in Ontario and Alberta," Statistics Canada said.
$ [( T# \9 M. u% h# d2 c
Commercial permits dropped 20.4 per cent to $972 million, with the declines mainly in office and recreational intentions in Ontario. Meanwhile, industrial permits rose 14.3 per cent to $236 million -- rebounding from a 50.8-per-cent drop in January -- with gains reported in six provinces.

+ F! L4 F9 D! }$ `4 XIn the residential sector, municipalities issued $756 million worth of multi-family permits, up 10.6 per cent from January. "The value of multi-family dwelling permits nearly quadrupled in British Columbia, while Quebec, Saskatchewan and Ontario reported declines," the agency said.
+ j9 t1 t" f; H/ f$ D& D! N
Single-family permits fell 5.5 per cent to $1.3 billion, mainly in Quebec, Ontario and Saskatchewan.
7 T7 d$ E, `+ c$ t+ T+ F: Q/ X
Ontario posted a 38.2-per-cent drop in permit values, with the declines spread across institutional and commercial buildings, and residential structures. Quebec saw overall permits fall 18 per cent, while Saskatchewan recorded a 43.5-per-cent decline.
. R  ?( m2 r- l$ G8 j! T
/ \5 L( l( T9 ?* a1 |8 {British Columbia led the increases in permit values in February, with an 86.5-per-cent jump across all sectors.

bmah@thejournal.canwest.com
+ A  h' K7 s% P0 V+ ?
) [& C  G. K/ T- k# ?* Z" }5 B© Copyright (c) The Edmonton Journal