Derrick Penner
Sun
Spending on residential construction in British Columbia in January fell to its lowest level in a single month in at least four years, figures released Friday by Statistics Canada show.
The federal agency reported that builders spent $337.4 million in inflation-adjusted dollars building new homes in January, down 16 per cent from December and down 24 per cent from the same month a year ago.
The previous recent low, in figures that go back to 2005, came in January 2005, when builders poured an inflation-adjusted $353 million into residential construction.
“When you’re comparing last year’s numbers with whatever is going on this year in anything construction-related, it’s obviously going to be down,” said Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association.
Simpson said it follows from a simple equation that sees housing sales decline first, which results in fewer housing starts, which spills over into job losses in the residential construction sector.
“There’s no doubt [slowing construction activity] has impacted us,” Simpson said. “We’re going from significant levels of employment to a reduced number, obviously.”
The decline in construction investment also follows from reductions in housing starts and building-permit applications.
January’s decline in construction activity was not as dramatic as the decline in housing starts. In January, Canada Mortgage and Housing Corp. counted 925 starts in B.C.’s urban centres, a 60-per-cent drop from January a year ago.
The total value of residential building permits taken out in January, which measures future intentions, however, was $191 million, down 70 per cent from the same month a year ago.
Simpson said builders are starting to become proactive about reducing their costs and encouraging subcontractors and suppliers to do the same in order to win the business that is out there.
“The pain is being felt by everybody so the solution has to be with everybody,” Simpson said.
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