B.C. is on track to set an annual record
Sun
The value of building permits in B.C. is on track to set a record this year, Credit Union Central of British Columbia predicts, with residential and non-residential permits forecast to total $12 billion.
Permit values for both classes of buildings for the first half of the year were $6.246 billion, a 23- per-cent increase over year-to-date figures last year.
At this rate, permits are expected to top the previous record of $10.8 billion set last year.
Total building permits in June dropped three per cent to $1.305 billion in June, down from a record high in May of $1.344 billion.
Non-residential building permits increased 19 per cent to $497.9 million, the second-highest monthly level for non-residential on record.
In the non-residential sector, commercial permits were up 19 per cent over May, institutional-government permits increased by 22 per cent and industrial permits rose by 9.3 per cent.
These gains were offset by a 13-per-cent monthly drop in residential building permits, to $807.6 million in June.
However, year-to-date permits in the housing sector are still up 25 per cent to $4.063 billion over the first six months of 2006, and are expected to top out at $8 billion, which would be another record.
The previous record for housing permits was last year’s $6.9 billion.
On a year-to-date basis, non-residential permits are up 19 per cent to $2.183 billion and are expected to top $4 billion, besting last year’s record of $3.9 billion.
All this comes with a shortage of skilled workers in the building trades.
“Construction employment is up, but the demand is even greater, hence the shortage of workers,” said Helmut Pastrick, CUCBC chief economist. “Volume is up, and that contributes to these numbers.”
However, the Vancouver civic workers’ strike, which prevents contractors from getting building permits, was not figured into the forecast. Should it go on much longer the strike will likely put a crimp in the forecast.
Last year, almost $2 billion in building permits were issued in the city of Vancouver, making up about 17 per cent of permit activity in the province.
“If this were to be a protracted event, then it would knock back the provincial numbers to some extent,” said Pastrick.
Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, said that while total value of permits is up, that’s because land, construction and civic costs have risen, and that the number of housing building permits is actually down 10 per cent from last year.
Once the strike is settled, Simpson expects a big rush in permit applications but also for inspections.
“When the strike is resolved, there won’t be any magic day when everything gets back to normal because there’ll be a backlog that the city will have to deal with,” said Simpson. “Nobody’s going to get their permits right away.”
The job action by CUPE 1004 and CUPE 15 comes during the prime summer building season, the problem exacerbated by a backup in work due to last winter’s heavy rain, wind and snow storms.
“The storms in November, December and January had us playing catch-up throughout the year,” said Simpson. “We were just starting to get on track, and then the Vancouver strike stalled things.”