Building permits and construction employment down
Employment numbers and permits values reflect overarching economic conditions
VRCA release – Building permit values fell in November and construction employment edged down in December, according to the Vancouver Regional Construction Association’s analysis of today’s Statistics Canada Labour Force Survey and building permit report. Continued change and volatility in the numbers is expected by the construction industry in the coming months as the effects of the global financial situation affect commercial investment, lending policies and consumer demand.
In the Lower Mainland-Southwest region, residential permits fell 20% and non-residential permits dropped 32% in November over October. Total building permit values in the Lower Mainland-Southwest region are down 14% to $6.2 billion the first eleven months of 2008 compared to the previous year. Residential permits are down 22% to $3.8 billion and non-residential permits are up two% in the same period.
“The downturn in permit values is a reflection of the overarching economic conditions, and we expect to see continued softness in construction until consumer and investor confidence return,” says Keith Sashaw, Vancouver Regional Construction Association President. “We are definitely in the downside of the cycle: however, the industry has come off a very robust and sustained period, and the current levels of non-residential construction are above where the industry was in mid 2006.”
Employment numbers slipped for the third consecutive month. 129,700 persons were working in the region in December 2008, down 3.1% from November. Employment was up 13.7% year-to-date over 2007.
“Employment responds to changes in the economy and financial markets with a time lag. It will take some time for the decreases in building permit activity to fully play out on the ground,” says Sashaw. “Prudent contractors will take advantage of the change in activity levels to plan for the anticipated recovery, which we expect later in 2009, by recruiting and training core employees.”
“We expect continued decreases in the employment numbers in the coming months as activity slows,” says Sashaw. “It is also likely that a portion of the work force may choose to retire during this period.”
The upcoming provincial and federal budgets are likely to contain accelerated infrastructure spending, says VRCA, which should provide a boost to the construction industry, particularly in the non-residential sector.
Highlights from the November 2008 building permit report include:
- Total building permits in the Lower Mainland-Southwest region fell 26% to $369.1 million in November 2008 compared to October 2008.
- Total building permit values in the Lower Mainland-Southwest region are down 14% to $6.2 billion in the first eleven months of 2008 compared to the previous year.
- Non-residential permits dropped 32% to $197.8 million in the Lower Mainland-Southwest region in November 2008 compared to October 2008 and residential permits are down 20% to $171.3 million for the same period.
Construction highlights from the December 2008 Labour Force Survey include:
- In the Lower Mainland-Southwest region, employment increased 13.7% (15,400 persons) year-to-date over 2007; employment dropped 3.1% (4,100 persons) in December from November 2008.
- Metro Vancouver’s employment increased 13.4% (12,400 persons) in 2008 compared to the previous year; employment dipped 1.3% (1,400 persons) in December over November 2008.
- Abbotsford CMA’s employment increased 12.3% (1,100 persons) in 2008 compared to the same period last year; employment was down 5.9% (600 persons) in December over November 2008.
- In B.C., construction employment in 2008 increased 12.2% (23,900 persons) compared to 2007; employment in December 2008 decreased 3.1% (6,300 persons) compared to November 2008.
