Vancouver Island Construction Report for Q3-2017

Transcription

1 Vancouver Island Construction Report for Q SUMMARY Construction activity increased on Vancouver Island during the third quarter of 2017 with building permits and construction employment rising. Robust conditions resulted in faster increases in construction costs. In the third quarter, building permits increased 5% to $647.5 million over the second quarter on Vancouver Island. More residential and non-residential permits contributed this overall gain. Industrial and Institutional-government building permits more than doubled in the quarter. All regional districts but two (Nanaimo and Mt. Waddington) on the Island saw more permits issued in the third quarter. The largest percentage gains were recorded in the Alberni-Clayoquot and Strathcona regional districts at 70% and 51%, respectively, from the second quarter. The Nanaimo Regional District saw a 1% decline. The Capital Regional District posted a 5% increase in the quarter led by a 15% jump in the West Shore communities. Building permits issued, year to date, were 18% higher at $1.712 billion for Vancouver Island compared to the first three quarters of last year. Residential permits were 23% higher, with non-residential up 5%. All regional districts on the Island, except Comox Valley, had more permits issued this year than last year. Capital Region District permits were 28% higher at $1.064 billion. Non-residential building construction investment spending in the Victoria Metro area posted a 13% increase in the third quarter over the second. Non-residential construction costs increased at a faster pace of 6.7% in the third quarter. Construction employment on the Island continued to rise in the third quarter with most of the gain this year in the Victoria Metro area. The outlook for the Island s construction industry remains positive in 2018 with further economic and population growth fueling the demand for residential and non-residential space. A low interest rate environment also provides impetus to real estate demand. TABLE OF CONTENTS [ 2 ] BUILDING PERMITS [11] CONSTRUCTION EMPLOYMENT [12] OUTLOOK [13] STATISTICAL APPENDIX ON WESTERN COMMUNITIES Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

2 Building VANCOUVER ISLAND Building permits grew 5% in the third quarter of 2017 from the second quarter on a 7% rise in non-residential permits and a 4% increase in residential permits. Compared to the same quarter in 2016, total permits were 15% higher with residential up 20% and non-residential 3% higher. The third quarter of 2017 saw large increases in industrial and government permits issued, while commercial permits came off a high level in the second quarter. issued year-to-date were 18% higher at $1.712 billion in 2017 compared to $1.453 billion last year. Residential permits were 23% higher in the first three quarters of this year compared to same period last year. Non-residential permit activity was little changed at $411.4 million, up 5% from last year. Commercial permits were 16% higher than last year at $220.8 million. Institutionalgovernment and industrial permits were 6% lower in the first three quarters than last year. Building Issued Vancouver Island Non-Residential Industrial Commercial Residential Apr-Jun , ,852 12, ,150 33, ,219 1,637 Jul-Sep , ,239 25,981 61,824 71, ,271 2,272 % change Jul-Sep , ,223 10,296 40, , ,472 1,726 Jul-Sep , ,239 25,981 61,824 71, ,271 2,272 % change Jan-Sep-16 1,452, ,194 58, , ,996 1,060,793 4,162 Jan-Sep-17 1,711, ,371 55, , ,262 1,300,214 5,138 % change Source: Statistics Canada, VICA. PERMITS BY REGION/MUNICIPALITY CAPITAL REGIONAL DISTRICT (CRD) WEST SHORE COMMUNITIES COWICHAN VALLEY REGIONAL DISTRICT NANAIMO REGIONAL DISTRICT ALBERNI-CLAYOQUOT-REGIONAL DISTRICT STRATHCONA REGIONAL DISTRICT COMOX VALLEY REGIONAL DISTRICT MOUNT WADDINGTON REGIONAL DISTRICT Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

3 CAPITAL REGIONAL DISTRICT (CRD) permits were up 3% in the third quarter over the second quarter of The dollar value of residential permits increased 6% in the quarter while the number of units climbed 54% over the second quarter. Institutional-government permits jumped 80% in the third quarter mostly offsetting large declines in industrial and commercial permits. non-residential permits slipped 3%. Compared to the third quarter of last year, total permits were 40% higher, led by a 46% increase in residential permits. Non-residential permits were up 26% largely on a 155% surge in commercial permits. In the first three quarters of the year, total permits were 28% higher at $1.064 billion compared to $830.5 million in the same period of Residential permits have risen 34% to $773.9 million year-to-date with the number of dwelling units up 45%. Year-to-date non-residential building permits were lifted by a 26% increase in government permits and a 22% rise in commercial permits. Industrial permit activity was 28% lower. Building Issued Capital Regional District Non-Residential Industrial Commercial Residential Apr-Jun , ,948 9,000 75,887 32, , Jul-Sep , ,879 5,638 49,506 57, ,915 1,505 % change Jul-Sep ,761 89,921 3,596 19,413 66, , Jul-Sep , ,879 5,638 49,506 57, ,915 1,505 % change Jan-Sep , ,272 40, ,002 81, ,240 2,077 Jan-Sep-17 1,064, ,510 28, , , ,870 3,015 % change Source: Statistics Canada, VICA Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

4 WEST SHORE COMMUNITIES Building permits increased 15% in the third quarter compared to the previous quarter, led by a 40% jump in non-residential permits. Non-residential permits were boosted by $8.3 million in institutional-government permits issued in the quarter. Commercial permits, the larger component, rose six%. The dollar value of residential permits rose 10% over the second quarter, while the number of units jumped 41%. Building permits were well ahead of the same quarter last year at 23% though nonresidential permits were 24% lower. Residential permits were 40% higher on dollar value and 85% higher on units. This year s activity is up a robust 41% to $377.3 million, led by a 47% surge in residential permits to $324.3 million. Year-to-date non-residential permits were led by a 144% increase in commercial permits, which offset lower activity in industrial and government permits. Building Issued West Shore Communities Non-Residential Industrial Commercial Residential Apr-Jun ,182 16,643 1,185 15, , Jul-Sep ,648 24, ,376 8, , % change ## Jul-Sep ,307 32, ,138 26,083 87, Jul-Sep ,648 24, ,376 8, , % change Jan-Sep ,568 46,711 2,521 16,900 27, , Jan-Sep ,319 52,999 1,484 41,270 10, ,320 1,444 % change Source: Statistics Canada, VICA. Note: Includes Colwood, Highlands, Langford, Metchosin, Sooke, and View Royal. # undefined; ## More than 1,000 % Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

5 COWICHAN VALLEY REGIONAL DISTRICT building permits edged up 5% in the third quarter over the second. Compared to the third quarter of 2016, total permits were 4% lower. The year-to-date comparisons were more robust with a 20% gain recorded this year to $124.4 million. Non-residential permits jumped 81% through to the third quarter this year led by large gains in government and commercial permits. Residential permits climbed 9% in the first nine months to $94.9 million. Building Issued Cowichan Valley Regional District Non-Residential Residential Industrial Commercial Apr-Jun-17 38,085 3, , , Jul-Sep-17 39,998 4,365 1,305 2, , % change Jul-Sep-16 41,870 6,426 3,633 1,114 1,679 35, Jul-Sep-17 39,998 4,365 1,305 2, , % change Jan-Sep ,699 16,308 7,548 5,639 3,121 87, Jan-Sep ,412 29,494 3,347 10,321 15,826 94, % change Source: Statistics Canada, VICA Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

6 NANAIMO REGIONAL DISTRICT A decline in residential permits held back total permits in the third quarter. permits slipped 1% lower to $112.1 million in the third quarter over the second. Residential permits were down 18% in the quarter to $76.9 million from $93.5 million in the previous quarter. Non-residential permits were 78% higher due to large spikes in institutional-government and industrial permits in the third quarter. Commercial permits fell 71% from the second quarter. Year-to-date permits activity was modestly higher than in the same period last year. permits were up 7% with non-residential up 11% and residential up 6%. Building Issued Nanaimo Regional District Non-Residential Residential Industrial Commercial Apr-Jun ,329 19, , , Jul-Sep ,120 35,201 18,099 5,309 11,793 76, % change ## -71 ## Jul-Sep ,653 17, ,362 6, , Jul-Sep ,120 35,201 18,099 5,309 11,793 76, % change Jan-Sep ,429 61,086 5,584 34,154 21, ,343 1,124 Jan-Sep ,388 67,715 19,746 35,675 12, ,673 1,041 % change Source: Statistics Canada, VICA. # undefined; ## More than 1,000 % Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

7 ALBERNI-CLAYOQUOT REGIONAL DISTRICT A large jump in residential permits issued boosted total building permits 70% higher than the second quarter. permits came in at $13.4 million in the third quarter with residential contributing $12.7 million. Non-residential permits fell in the third quarter from the second quarter and from one year ago. Year-to-date total permits were 18% higher over the same period last year. Residential permits rose 13% to $26.1 million, while non-residential jumped 46% to $6.1 million Building Issued Alberni-Clayoquot Regional District Non-Residential Industrial Commercial Residential Apr-Jun-17 7,891 2, , , Jul-Sep-17 13, , % change Jul-Sep-16 9, , Jul-Sep-17 13, , % change Jan-Sep-16 27,350 4,196 1,737 1, , Jan-Sep-17 32,213 6, , , % change Source: Statistics Canada, VICA Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

8 STRATHCONA REGIONAL DISTRICT A large increase played out in the third quarter with total permits increasing 51% over the second quarter lifted by both residential and non-residential permits. Residential permits climbed 53% to million in the quarter while non-residential rose 36% to $2.7 million. The year-ago comparison was 95% higher for total permits, led by a 114% jump in residential permits. However, year-to-date total permits were at about the same level as last year, only one% higher. Residential permits were 24% higher at $53.1 million and offset the 57% drop in nonresidential permits. Building Issued - Strathcona Regional District Non-Residential Residential Industrial Commercial Apr-Jun-17 17,215 1, , , Jul-Sep-17 25,934 2, , , % change Jul-Sep-16 13,289 2, , , Jul-Sep-17 25,934 2, , , % change Jan-Sep-16 60,125 17, ,249 6,572 42, Jan-Sep-17 60,631 7, , , % change Source: Statistics Canada, VICA Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

9 COMOX VALLEY REGIONAL DISTRICT Residential permits lifted total permits higher in the third quarter of permits rose 10% to $38.4 million in the third quarter on an 11% rise in residential permits to $36.1 million. Non-residential permits slid two% lower in the quarter. were lower than one year ago across all categories. Year-to-date permits totaled $104 million this year, down 21% from the same period last year. Residential permits were 10% higher while non-residential fell 86%. Non-residential permits were lower in all three categories, most notably in the institutionalgovernment sector with a 96% drop from a very high level last year. Building Issued Comox Valley Regional District Non-Residential Industrial Commercial Residential Apr-Jun-17 34,808 2,321 1, , Jul-Sep-17 38,360 2, , , % change Jul-Sep-16 80,303 38,069 1,750 6,948 29,371 42, Jul-Sep-17 38,360 2, , , % change Jan-Sep ,119 41,640 2,966 7,933 30,741 89, Jan-Sep ,000 5,765 2,037 2,558 1,170 98, % change Source: Statistics Canada, VICA Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

10 MOUNT WADDINGTON REGIONAL DISTRICT Third quarter permits fell 30% from the second quarter mainly on residential permits. Compared to the same quarter last year, residential and non-residential permits were considerably higher. Year-to-date total permits were nearly triple last year s level on large increases in nonresidential permits, led by institutional-government. Residential permits were 56% higher to $2.3 million. Building Issued Mount Waddington Regional District Non-Residential Industrial Commercial Residential Apr-Jun-17 2,672 1, , ,596 3 Jul-Sep-17 1,882 1, , % change # -99 # Jul-Sep Jul-Sep-17 1,882 1, , % change # Jan-Sep-16 1, ,500 4 Jan-Sep-17 6,561 4, ,101 2,913 2,340 5 % change 274 ## # Source: Statistics Canada, VICA. # undefined; ## more than 1,000 % Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

11 Construction Employment Construction employment on the Island remained at a high level and edged up in the third quarter. There was some slippage in Victoria, while there was a substantial gain in the rest of the Island. In the first three quarters of 2017, employment was 2.4% higher than the same period in 2016, with the entire increase occurring in Victoria. The small sample size in the Labour Force Survey results in considerable quarterly variation. Seasonal adjustment removes some but not all this variability. The underlying trend is increasing in both Victoria and the rest of the Island, with Victoria slightly stronger. Construction Industry Employment Vancouver Island Victoria Vancouver Island and Coast Metropolitan Area excluding Victoria (Persons thousands) Q Q % change Q1-Q Q1-Q % change Source: Statistics Canada, VICA. Note: 3-month average at end of quarter. Averages for year-to-date. Components may not add due to rounding. Seasonally Adjusted Construction Employment Vancouver Island and Coast Victoria Metropolitan Area Vancouver Island excluding Victoria (Persons thousands) Q Q Q Q Q % change Q2-17/Q Source: Statistics Canada, VICA. Note: 3-month average at quarter end. Components may not add due to rounding Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

12 Outlook The Island s construction sector is very active with more building sites underway, rising construction employment, and accelerating construction costs. The industry s upturn, which began in early 2014, is setting higher activity levels with each passing quarter. Residential construction was the initial driver and continues to be the main force behind the upturn. Recently, non-residential construction has turned up sharply to give added impetus to this construction cycle. The outlook for residential construction remains positive with improving external and local economic conditions expected in Tight housing markets characterized by rising prices and low vacancy rates will require more supply and new construction to meet demand. The stress test for uninsured mortgages required by the federal bank regulator in the new year will reduce home sales to some extent as will gradually higher mortgage rates. However, other demand drivers, such as job and income growth and in-migration from other parts of BC and other provinces, provides a high sales floor. Non-residential building construction will also expand with the Island s improving economy, though at a variable pace due to the large nature of many projects. Market conditions for office, retail, and industrial space have become more conducive for new investments. Government building projects are also on the horizon. Construction costs look to continue increasing at a faster pace as long as building activity expands, labour supply is limited, and higher building materials costs prevail. Lumber and panel prices have risen substantially this year. Energy costs are also higher this year. The Island s construction industry will experience another busy year in 2018 and face a more challenging cost environment. MEDIA CONTACT Rory Kulmala, Chief Executive Officer Vancouver Island Construction Association rorykulmala@vicabc.ca Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

13 Statistical Appendix on Western Communities Building Issued Colwood City Non-Residential Industrial Commercial Residential Apr-Jun-17 11, , Jul-Sep-17 32,973 3, ,595 29, % change 196 ## 0 ## # Jul-Sep-16 25, , Jul-Sep-17 32,973 3, ,595 29, % change ## Jan-Sep-16 40,668 2, , , Jan-Sep-17 69,736 3, ,299 2,595 65, % change # Source: BC Stats, VICA. # undefined; ## More than 1,000 %. * permits surged 196% higher in the third quarter boosted by a 166% jump in residential permits and a spike in government permits. Year-to-date permits were running 71% than in the same period in Building Issued Highlands Non-Residential Industrial Commercial Residential Apr-Jun Jul-Sep % change Jul-Sep-16 2, , Jul-Sep % change Jan-Sep-16 5, , Jan-Sep-17 1, ,377 6 % change Source: BC Stats, VICA. # undefined; ## More than 1,000 %. * Subdued permits activity in the Highlands prevailed during the third quarter, consistent with the prior quarters this year Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

14 Building Issued Langford Non-Residential Industrial Commercial Residential Apr-Jun-17 88,480 16,146 1,031 15, , Jul-Sep-17 73,917 4, ,366 2,910 69, % change # Jul-Sep-16 76,538 26, ,705 21,348 50, Jul-Sep-17 73,917 4, ,366 2,910 69, % change Jan-Sep ,756 36,513 2,374 12,791 21, , Jan-Sep ,788 30,951 1,286 24,930 4, , % change Source: BC Stats, VICA. # undefined; ## More than 1,000 %. * Langford permits declined in the third quarter to $73.9 million, down 16% from the second quarter. * Year-to-date permits were higher than last year despite the fall off in the third quarter. permits were up 23% to $222.8 million. Building Issued Metchosin Non-Residential Industrial Commercial Residential Apr-Jun-17 1, ,826 4 Jul-Sep-17 4,301 2, ,500 1,801 5 % change 136 # 0 0 # Jul-Sep Jul-Sep-17 4,301 2, ,500 1,801 5 % change 631 ## # Jan-Sep-16 2, ,038 3 Jan-Sep-17 7,789 2, ,500 5, % change 274 ## # Source: BC Stats, VICA. # undefined; ## More than 1,000 %. * Metchosin total permits more than doubled in the third quarter on a government building permit while residential activity was unchanged Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3

15 Building Issued View Royal Non-Residential Industrial Commercial Residential Apr-Jun-17 17, , Jul-Sep-17 30,397 14, , , % change 71 ## 0 ## Jul-Sep-16 8,475 5, ,714 2, Jul-Sep-17 30,397 14, , , % change ## Jan-Sep-16 16,119 7, ,522 4,994 8, Jan-Sep-17 53,085 14, , , % change Source: BC Stats, VICA. # undefined; ## More than 1,000 %. * View Royal jumped 71% to $30.4 million in the third quarter from the second quarter due to a $14 million surge in commercial permits. Year-to-date total permits were more than 200% higher than last year led by a larger increase in residential permits. Building Issued Sooke Non-Residential Industrial Commercial Residential Apr-Jun-17 8, , Jul-Sep-17 5, , % change # Jul-Sep-16 7, , Jul-Sep-17 5, , % change ## Jan-Sep-16 21, , Jan-Sep-17 22, , % change ## 3 8 Source: BC Stats, VICA. # undefined; ## More than 1,000 %. * Sooke total permits fell back 28% in the third quarter on a 30% decline in residential permits from the second quarter. Year-to-date permits were 5% higher than the same period last year Alston Street, Victoria, BC V9A 3S6 # Northfield Road, Nanaimo, BC V9S 3B3