Don’t expect Greater Vancouver’s red-hot construction boom to cool off any time soon.

Contractors took out building permits worth $340 million in March, a slight drop (4.3 per cent) from February ($356 million), Statistics Canada reported Thursday.

But the value of building permits issued in Greater Vancouver for the first three months of the year was $1.18 billion, up 41 per cent from January-March 2003.

Vancouver and Montreal led the gains in over-all construction plans this year, thanks to the demand for new multi-family dwellings in both areas, widespread strength in all non-residential construction intentions in Montreal and commercial building plans in Vancouver.

In every province, the cumulative value of housing permits has been higher this year than in 2003.

B.C. saw its January-March value of all permits jump to $1.47 billion, a 32.7-per-cent increase from the same period of 2003.

Only Newfoundland and Prince Edward Island had higher percentage increases.

The report will be greeted with mixed feelings by the Bank of Canada, which is counting on strong spending by Canadian businesses and consumers to offset the weakness in exports caused by last year’s runup in the dollar.

“Over-all construction intentions fell in March as a plunge in the value of building permits for non-residential projects far offset a gain in housing projects,” Statistics Canada said.

Nationwide, contractors took out building permits worth $4.2 billion in March, down 4.2 per cent from February. Residential permits totalled $2.91 billion, up 4.5 per cent, just below the record high set last December, it noted. In contrast, non-residential permits nosedived 19.4 per cent to a two-year low of $1.29 billion.

“March’s big dip in mortgage rates likely inspired that month’s increase in residential construction intentions,” said RBC economist Carl Gomez. “But other fundamentals are also keeping the housing sector well supported, including relatively tight resale market conditions, strength in full-time employment and solid consumer confidence.

“As such, the housing market is set for yet another great year, although slightly higher mortgage rates down the road suggest some moderation,” Gomez added.

“Canada‘s housing market remains strong, as building permits have surpassed the $2.9-billion mark for three of the past four months,” Statistics Canada noted. “This remarkable result is because of the strong demand for both single- and multi-family dwellings.”

“The vigorous housing market … had a direct impact on other sectors of the economy,” it said, pointing to strong sales of furniture, home furnishings and electronics, and heavy demand for manufactured wood products.

© The Vancouver Sun 2004