Growth up by19% this year and next
Gordon Clark
Province
B.C.’s record-setting building boom is showing no signs of slowing down.
Investment in non-residential construction is expected to hit $16.3 billion this year, up 19 per cent from 2006, Credit Union Central of B.C. said yesterday in its latest Economic Analysis of B.C. newsletter.
And CUCBC economist Dave Hobden is predicting that the value of non-residential construction will grow by a further 19 per cent next year and another 11 per cent in 2009.
“Forecast demand for non-residential buildings is driven by continued moderate-to-robust growth in consumer spending, office employment, real GDP and accommodation revenues,” Hobden said.
Hobden said the high growth will lead to rapidly rising costs on the projects due to “limited supplies of labour and services . . . The outlook is for demand to continue to outpace supply, leading construction costs to rise by an average of 10 per cent this year, 11 per cent in 2008 and nine per cent in 2009.”
Credit Union Central said gross domestic product from non-residential construction is expected to rise at twice the rate of B.C.’s overall GDP.
“Robust growth in both jobs and average earnings will boost labour income, while net business incomes and returns on invested capital will remain high,” the group said. “By dollar volume, about 41 per cent of current and planned non-residential projects involve an extensive variety of commercial and institutional buildings.
The Lower Mainland-Southwest and Thompson-Okanagan regions will experience the fastest growth in non-residential construction, the group said.
“Moderately robust” growth is forecast for Vancouver Island and the Kootenays while the Cariboo, the Northeast and North Coast-Nechako areas can expect “moderate growth.”
© The Vancouver Province 2007