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July 2008

Current News

Inter-Provincial Labour Mobility Applauded - July 23, 2008

The Canadian Employee Relocation Council (CERC) - Canada's only organization devoted to advancing the interests and issues for workforce mobility - today voiced its support of The Council of the Federation's announced agreement that opens the door to full labour mobility within Canada by the summer of 2009.

CERC Executive Vice President Stephen Cryne said, "We are pleased to see the premiers have finally taken decisive action on an issue that is vital to Canada's economic future. While it is long overdue, this agreement is good for the provinces and certainly good news for employers who are experiencing labour shortage in many areas and sectors of the economy. Employers have been lobbying governments at all levels to address these long standing restrictions on labour mobility."

The proposed changes will level the playing field as Canada competes with other modern economies for increasingly scarce sources of skilled labour. Skilled immigrants looking to enter Canada have been deterred not only by an overburdened immigration system, but also by the inability to move freely for employment within Canada when they arrive.

If implemented the agreement will mirror what has proven to be the highly successful Trade, Investment and Labour Mobility Agreement (TILMA) in place between B.C. and Alberta. Under that agreement there is recognition of credentials and training between the provinces in many occupations. Quebec is also in discussions with France for an open mobility agreement that would see a plumber licensed in France being able to ply her trade in Quebec. Statistics Canada reports that some 563,000 Canadians moved to a different province or territory between 2001 and 2006.

According to Cryne, "This announcement is one more step in addressing Canada's future labour shortages, which are expected to become even more acute within the very near future. The challenge now," said Cryne, "will be getting the over 400 regulatory and licensing bodies on the same page to develop the national frameworks needed to make this work by the 2009 deadline."

House Prices Still Increasing - July 17, 2008

Canada's real estate market is poised to maintain the momentum gained from a solid second quarter through to the end of 2008, with Regina set to experience the greatest rise in house prices. While home prices are expected to appreciate in all but two major markets during the year, activity levels across the country are expected to decline from 2007's record-setting pace, as pent-up demand is satisfied and some buyers retreat to the sidelines in the face of increasing economic uncertainty, according to a House Price Survey and Market Survey Forecast report released today by Royal LePage Real Estate Services.

During the second quarter, average house prices rose across most of the country with rates of appreciation easing from the dramatic spikes that were observed in 2006 and 2007. Continued robust demand led to strong double-digit gains in Saskatchewan, Winnipeg and St. John's; while a surge in inventory caused Alberta's white-hot market to record the country's only major-market price decreases.

"Canada's resale housing market proved resilient in the second quarter. In fact, we have been pleasantly surprised that strong fundamentals, such as enduringly positive employment numbers and reasonable mortgage rates, have countered increasingly pessimistic consumer sentiment, based primarily on the American housing recession," said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.

Added Soper: "After several years characterized by a persistent shortage of listings, home buyers have felt the pressure of bidding wars and take-it-or-leave-it counter offers ease during 2008; home sellers have had to come to grips with the longer time it is taking to sell properties, but can take comfort in a market that continues to support reasonable price increases. Our research indicates that all markets will continue to perform well, albeit at a tempered pace."

The national average house price is forecast to rise by 3.5 per cent, to $318,000 by the year's end. Home sale transactions are projected to decrease by 11.5 per cent to 461,000 unit sales by the end of 2008.

Examining figures from the second quarter, the highest average price appreciation occurred in detached bungalows, which rose by 5.6 per cent to $351,587, followed by standard two-storey properties, which rose to $418,943 (5.2%), and standard condominiums, which increased to $248,408 (3.9%), year-over-year.
An extreme inventory shortage has helped pressure prices upwards in the mid-west, while excess supply loosened markets in the previously frenzied Alberta.

While Saskatchewan's cities recorded the country's highest price gains, Winnipeg followed closely behind. Growth in agricultural sectors, and subsequently high levels of immigration required housing that simply could not be met by current levels of inventory. The inevitable result of a booming economy was observed as the markets held strongly in the sellers' favor as house prices skyrocketed in both Saskatchewan and Manitoba.

In Vancouver, a spike in inventory during the second quarter simmered the heat in the long-standing hot market, resulting in single-digit average house prices increases for most areas examined, when compared to this time past year. Despite the increase in listing volumes, buyer's interest remained strong and it is anticipated that much of the inventory will be absorbed over the next few quarters, leading to low single digit price appreciations through to the year's end.

Victoria's housing market continued to experience average price increases during the second quarter, compared to the same period last year. While average house prices continued to increase, the pace has definitely tempered from the frenetic pace observed in previous quarters. Victoria is experiencing a more normal and healthier real estate market.

BoC Keeps Overnight Rate at 3 Per Cent - July 15, 2008

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3 per cent. The operating band for the overnight rate is unchanged, and the Bank Rate remains at 3 1/4 per cent.

Three major developments are affecting the Canadian economy: the protracted weakness in the U.S. economy; ongoing turbulence in global financial markets; and sharp increases in many commodity prices. The first two developments are evolving roughly in line with expectations in the April Monetary Policy Report. However, commodity prices are continuing to outstrip earlier expectations. This has led to further increases in Canada's terms of trade and real national income, and has altered the outlook for global and domestic inflation.

Although Canadian economic growth in the first quarter was weaker than expected, final domestic demand continues to expand at a solid pace. The economy is judged by the Bank to have moved into slight excess supply in the second quarter of this year; excess supply is expected to increase over the balance of the year. High terms of trade, accommodative monetary policy, and a gradual recovery in the U.S. economy are expected to generate above-potential growth starting early next year, bringing the economy back to full capacity around mid-2010. Canadian GDP is projected to grow by 1.0 per cent in 2008, 2.3 per cent in 2009, and 3.3 per cent in 2010.

Total CPI inflation over the next year is expected by the Bank to be much higher than projected at the time of the April Report. Assuming energy prices follow current futures prices over the projection period, total CPI inflation is projected to rise temporarily above 4 per cent, peaking in the first quarter of 2009. As energy prices stabilize and with medium-term inflation expectations remaining well anchored, total inflation is then projected to converge to the core rate of inflation at the 2 per cent target in the second half of 2009. Core inflation is projected to remain well contained and broadly in line with earlier expectations, averaging close to 1.5 per cent through the third quarter of this year and then rising to 2 per cent in the second half of 2009.

The three major developments affecting the Canadian economy pose significant upside and downside risks to the Bank's base-case projection. Weighing the implications of these, the Bank views the risks to its base-case projection for inflation as balanced. Against this backdrop, the Bank judges that the current level of the target for the overnight rate remains appropriate. The Bank will continue to monitor carefully the evolution of risks, together with economic and financial developments in the Canadian and global economies, and set monetary policy consistent with achieving the inflation target over the medium term.

Non-Res Construction Investment Declines in BC - July 14, 2008

Rising construction prices contributed significantly to a 0.9% increase in current dollars in investment in non-residential building construction in the second quarter of 2008. According to a report released this morning by Statistics Canada, investment reached $10.5 billion between April and June as the increase was led by spending on medical facilities and office buildings. However, after taking into account higher construction prices, investment in non-residential construction declined 3.7% in 2002 constant dollars.

Investment increased in all three components from the first quarter. In the commercial component, it rose 0.8% to $6.5 billion. In the industrial component, it went up 1.6% to $1.5 billion, and in the institutional component, it edged up 1.0% to $2.6 billion.

Six provinces recorded second-quarter gains. The biggest increases, in dollars, occurred in Alberta, Ontario, Quebec and Saskatchewan. In contrast, British Columbia posted the biggest decline (-5.1%), the result of lower spending on commercial, institutional and industrial projects. These projects were started in 2006 and early 2007 and are now almost completed.

Overall, 21 of the 34 census metropolitan areas posted quarterly declines. The biggest drop was observed in Vancouver (-7.7%).

Housing Starts Down in BC - July 9, 2008

The seasonally adjusted annual rate of housing starts was 217,800 units in June, down from 227,700 units in May, according to Canada Mortgage and Housing Corporation (CMHC).

“Despite the decrease in June, total housing starts remain at high levels.” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “This is mostly due to the multiple segment which has been continuously above the 100,000 unit threshold since the beginning of the year.”

The seasonally adjusted annual rate of urban starts moved down by 5.0 per cent in June compared to May. Both urban multiples and singles decreased, with a decline of 3.0 per cent for multiples to 114,700 units, and a 7.8 per cent drop for singles to 74,600 units.

The seasonally adjusted annual rate of urban starts went down in all regions of Canada, except Ontario, where housing starts increased by 10.8 per cent to 77,900 in June. Urban starts declined to 8,500 units in Atlantic Canada, 40,300 units in Quebec, 31,200 units in the Prairies, and 31,400 units in British Columbia. Both single and multiple urban starts decreased in all regions in June, with the exception of multiple starts in Ontario which increased by 30 per cent.

Rural starts were estimated at a seasonally adjusted annual rate of 28,500 units in June2.

For the first half of 2008, actual starts in rural and urban areas combined were up an estimated 1.5 per cent compared to the same period last year. Year-to-date actual starts in urban areas have increased by an estimated 6.1 per cent over the same period in 2007. Actual urban single starts for the first six months of this year were 13.1 per cent lower than they were a year earlier, while multiple starts were up by 23.1 per cent over the same period.

Finding a Miracle Building Product - July 9, 2008

Wouldn't it be great if someone could invent a solar-generated building product? One that is versatile, easy to use and not too expensive? In British Columbia we already have plenty of this miracle product. It's called wood.

"In a province like ours, it is easy to take wood for granted," says Mary Tracey, executive director for BC Wood WORKS! (Canadian Wood Council). "We've been building with wood for centuries, and for good reason. Today, wood has an added bonus - it may be one of the easiest, most attractive and most comfortable ways to show we care about the environment."

Take a closer look and the benefits are obvious. Wood is natural - it comes from forests that grow with solar energy, clean the air and water, provide habitat and recreational opportunities. When it comes from sustainable managed forests, like those in Canada, it is totally renewable. Wood products have immense versatility; they are durable, strong, lightweight, reusable - and look fantastic.

"Studies have proven that wood is a high-performance building material," Tracey says. "It doesn't weigh a lot yet it has a high density, with excellent load-bearing and thermal properties. It has a higher strength-to-weight ratio than either steel or concrete."

There is a wide range of wood products to meet any construction need. Wood-frame buildings are an excellent platform for solar panels or modern
technology systems that control humidity and ventilation and recover heat.

Big Gains in Non-Res Construction Intentions - July 7, 2008

The total value of building permits increased for the second consecutive month in May, despite a substantial decline in the residential sector. A Statistics Canada report issued this morning shows that contractors took out $6.6 billion in permits in May, up 1.1% from April and the highest value for permits since October 2007. The total was 6.7% above the monthly average for 2007. It was the first back-to-back increase in construction intentions since November 2006, and could point to busy construction sites in the coming months. The value of building permits has followed an upward trend since the beginning of the year.

In the non-residential sector, municipalities issued $2.9 billion in permits, up 12.8%, a second consecutive gain. The rise came mostly from strong increases in the industrial and institutional intentions.

The value of permits in the residential sector has been on a downward trend since September 2007. Residential intentions fell 6.6% to $3.7 billion in May, the result of a considerable decrease in the value of multi-family permits.

Non-residential: Strong gains in both industrial and institutional

The value of building permits in the non-residential sector increased by 12.8% in May, with gains in all three components, following a 27.8% increase in April. The trend for non-residential construction intentions edged up in the previous six months, as a result of growth in the commercial component.

In the industrial component, the value of permits issued increased 62.1% to $536 million in May, the highest level since June 2006. The gains came mostly from utility buildings.

In the institutional component, intentions rose 16.4% to $646 million, largely the result of new hospitals and schools. May's value was 12.7% higher than the average monthly level in 2007, an exceptional year for institutional construction.

In the commercial component, municipalities issued permits worth $1.7 billion, up 2.1% following a 36.4% gain in April. It was the fifth increase in six months and took the level to its highest point in a year. The increase came from construction intentions for warehouses.

Residential: Multiple-family housing brings down intentions

A strong decline in the value of permits for multiple-family dwellings brought down intentions in the residential sector in May.

The value of multiple-family permits fell 15.5% to $1.5 billion, after rising 31.4% in April. Even so, May's level was 6.2% higher than the average monthly level registered in 2007. Municipalities approved 11,040 multiple-family units, down 7.9%. After two month of declines, the value of single-family permits edged up 0.5% in May to $2.2 billion. The number of single-family units authorized declined 2.3% to 8,116, the lowest since May 2001. The overall number of residential units approved has been on a downward trend since the summer of 2007.

Permits up in half of the provinces

The value of building permits increased in half of the provinces in May. Ontario had the largest increase in terms of dollars, followed by British Columbia and New Brunswick.

Ontario permits increased by 3.1% to $2.5 billion, due to a 26.4% jump in the value of construction intentions for non-residential buildings. The non-residential sector reached its fourth highest value since January 1989.

Also posting gains were British Columbia (+5.7%) and New Brunswick (+67.1%). New Brunswick reached an all-time high with permit values of $122 million. Both provinces had strong intentions for non-residential.

In contrast, Alberta and Saskatchewan experienced large declines (in terms of dollars). In Alberta, a reduction of 3.7% to $1.2 billion came mainly from drops in the values of institutional and multiple residential projects. After a record high in April, intentions in Saskatchewan decreased 19.5% due to lower levels in both residential and non-residential sectors.

Permits up in less than half of the metropolitan areas

Of the 34 census metropolitan areas, 16 recorded gains in the value of building permits in May.

The largest increase (in dollars) occurred in Vancouver, where a record monthly high in the non-residential sector more than offset a decline in intentions for residential dwellings.

Edmonton also posted a significant increase, as a result of strong growth in both residential and non-residential sectors.

In contrast, the total value of permits in Toronto declined in May, due to large drops in multiple dwellings. This came on the heels of the second highest month on record for multiple housing.

Housing Starts Expected to Soften in BC - July 3, 2008

British Columbia's economy continues to trend above the national average, although further weakness in its exports is expected to restrain growth to 2.2 per cent in 2008 and 2.9 per cent in 2009, according to a provincial economic outlook released today by RBC.

"The current decade has proven to be very prosperous for British Columbia as 2007 marked the sixth consecutive year of economic growth above of the national average and we expect this trend to continue right through to 2010," said Craig Wright, senior vice-president and chief economist, RBC. "However, the challenges facing the province's exporters are many and do not appear to be letting up, particularly with respect to the rout in the U.S. housing construction sector."

According to the report, wood products are leading five of the top six export categories showing declines so far this year, with only the energy sector garnering a gain. Nevertheless, the province's strong domestic economy continues to adequately compensate for the trade sector slump and should help to keep British Columbia among the provincial growth leaders in Canada.

However, signs of cooling are emerging domestically as well. Housing resale activity has levelled off and housing starts are forecast to soften over the course of the next two years. Growth in non-residential construction appears to be peaking. Consumer spending is on course to a slower pace as the momentum generated by the recent run-up in employment and steady decline in the unemployment rate starts to fade.

The main theme of the Provincial Outlook continues to be the different paths the Eastern and Western parts of the country are taking. Record-high commodity prices and strong global demand for resources sustain unprecedented prosperity in the Western provinces, while the strong Canadian dollar, downturn in the U.S. economy and high energy prices continue to cause hardship in key sectors in provinces east of Manitoba. Saskatchewan is projected to lead all of the provinces in economic growth for both 2008 and 2009, followed by Alberta, while Newfoundland and Labrador and Ontario are expected to lag the group this year, but should show some improvement next year.

Entrepreneur Of The Year Finalists Announced - July 3, 2008

Today's entrepreneurs continue to fill a critical role in the success of the Canadian economy and some of these entrepreneurs are found in the construction and landscaping industries. For the last 15 years, Ernst & Young have been honoring the best organizations in their Entrepreneur Of The Year Awards.

"I am amazed by the entrepreneurial determination and perseverance thriving here in British Columbia," said Fred Withers, Director of the Ernst & Young Entrepreneur Of The Year Awards program for the Pacific region. "Entrepreneurs drive our region's business success, while motivating others through their unwavering commitment and innovative thinking. And this year's finalists are no exception."

The following are among the finalists in this years award for the Pacific region. The Pacific region winners will be announced at a banquet on October 8, and the overall winner will represent the region at the national banquet in November.

Ivan Harmatny, Ron McNeil
Lower Mainland Steel Group
Surrey
Rebar supply, fabrication and installation company.

Andrew Purdey
Ruskin Construction Ltd.
Prince George
Specialized foundation, marine and industrial bridge construction company.

John C. Scott
Scott Construction Group
Vancouver
Construction company offering preconstruction and construction services customized to the needs of their clients.

BCdex offers the winner of this years Pacific region award, in the construction industry, a free one year Premier Listing on the BC Construction and Landscaping Network worth $600.00.

 

 

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