Non-residential investment spending in the Vancouver CMA continued to decline in the second quarter of 2010, according to Vancouver Regional Construction Association’s analysis of Statistics
Canada’s Investment in Non-Residential Building Construction report. Total non-residential investment spending declined 9.6 per cent to $553.5 million (seasonally adjusted) compared to $612.2 million in the first quarter of this year. Total non-residential investment spending in Metro Vancouver is down 21.3 per cent over the second quarter of 2009.
“Declines in non-residential construction investment were expected for the second quarter of 2010,” says Keith Sashaw, president of the Vancouver Regional Construction Association. “The economic recovery is only beginning its second year, and has yet to reach all sectors and industries, which would affect commercial and industrial investment.”
Institutional government building investment dropped 9.0 per cent in Q2, following two consecutive quarterly gains. “This decline will likely be a dip,” says Sashaw. “We are in the midst of the fiscal stimulus program and building permits issued for public structures are at the highest level since 2006. Both of these factors suggest future spending will rise.”
Construction cost inflation in Metro Vancouver declined 6.9 per cent in the second quarter of 2010 compared to a 10.9 per cent decrease one year earlier. The slowing rate of decline in construction costs will likely hit bottom later this year, says VRCA. Though building materials and costs are increasing, the overall rate of construction costs is likely being maintained by lower labour costs and excess supply of capacity.
“The reduction in building costs continue to be a positive factor as they make investments more financially viable and will help spur the next upturn”, says Sashaw.
Highlights from the second quarter Investment in Non-residential Building Construction report:
Vancouver Census Metropolitan Area (CMA)
Quarterly comparisons
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Non-residential investment spending declined 9.6 per cent in the second quarter of 2010 to $553.5 million (seasonally adjusted) from $612.2 million in the first quarter.
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Commercial building investment dropped 9.7 per cent to $384.3 million.
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Industrial investment was down 12.1 per cent to $18.3 million.
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Institutional-government investment declined 9.0 per cent to $150.9 million.
Year-over-year comparisons
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Non-residential spending totaled $566.4 million in the second quarter of 2010, down 21.3 per cent over the second quarter of 2009.
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Commercial building investment declined 27.4 per cent to $393.3 million.
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Industrial investment was down 44.2 per cent to $18.7 million.
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Institutional-government spending is up 6.8 per cent to $154.4 million.
With more than 700 members, VRCA is British Columbia’s largest and most inclusive regional construction association, representing union and non-union, general and trade contracting companies, manufacturers, suppliers and other professionals throughout the Lower Mainland from Hope to Whistler.
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Full regional data and graphs attached. For more information, please contact:
Keith Sashaw - Vancouver Regional Construction Association – 604-294-3766
Tanya Anand - Edelman - 604-623-3007