Alberta, B.C. give boost to building permit data
Without the two, increase would have been 1%
Geoffrey Scotton Calgary Herald Wednesday, February 07, 2007
Frenzied construction in Alberta, and to a lesser extent in neighbouring British Columbia, pushed the value of planned new building in Canada in 2006 deep into record territory, as national building permit values soared by nine per cent to more than $66.2 billion. Statistics Canada said Tuesday that with permits of $5.4 billion in 2006, the growth in permit value in the Calgary region eclipsed all other major Canadian cities with an expansion of almost 40 per cent, while Alberta's stunning economic boom boosted 2006 permit values ahead more than 36 per cent to nearly $13 billion. B.C. experienced 13.2 per cent growth to $11.5 billion in permits, with particular growth on the non-residential side.
Local observers don't expect the pace in Calgary and across Alberta to slow much as 2007 unfolds. "The key here is that the vacancy rates are still low, so you can only expect further building activity," said Patrick Walters, manager of corporate economics for the City of Calgary. "The conditions are right for construction in '07. Whether we'll have the record performances of last year is a question, but the conditions are right." While the federal agency noted there were records set in every province except Prince Edward Island and Ontario in 2006, StatsCan emphasized that it was Alberta, in particular, and the West generally that fuelled the record performances seen at the national level in 2006.
"If Alberta and British Columbia were excluded, the overall value of permits would have increased just one per cent instead of nine per cent," StatsCan said in its report, which focused on results for December and all of 2006. "These two provinces showed the biggest gains for both residential and non-residential components." Alberta's performance on the non-residential side led the country, with permit values up 38.5 per cent to a record $5.7 billion and unprecedented results in each of the industrial, commercial and institutional components. National non-residential permits hit a record $25.2 billion.
"The provincial government is running very healthy surpluses, and some of that money gets recycled . . . in payments for infrastructure," said Walters. "In terms of the private sector, very healthy resource prices become recycled through drilling activity and the building of non-residential space." Ottawa-based StatsCan noted that much of the record overall values for building permits can be attributed to soaring housing prices -- and Alberta was front and centre in that phenomenon, as well. In Calgary, new home prices in November were 50 per cent higher than a year before and Edmonton's were 43 per cent higher. In contrast, across Canada last year the actual number of new single-family homes permitted in 2006 fell to a five year low of 119,140, a decline of 2.2 per cent from 2005. "Even so, the value of single-family permits jumped 6.3 per cent to $26.7 billion in the wake of higher prices, especially in Alberta," said StatsCan.
The remarkable strength in Alberta's construction sector was also apparent in December, when permit values in Wild Rose Country continued to rise while declines were seen nationally -- down 7.8 per cent to $5.8 billion -- and in six of the ten provinces. Alberta's permit value jumped 5.5 per cent from November to a record $1.4 billion, thanks to a flurry of industrial and commercial projects, while B.C.'s dropped from a record high in November to their lowest level in eight months, with declines across the board.
gscotton@theherald.canwest.com
© The Calgary Herald 2007