2010 review and 2011 outlook for Canadian non-residential construction starts

Posted by Rumin Mann
January 14th, 2011

According to CanaData – the forecasting and statistics-gathering arm of Reed Construction Data-Canada – non-residential building starts nation-wide are at a pace to reach 74.0 million square feet in this current year, 2010. That’s compared with only 50.3 million square feet in 2009.

In other words, the level of non-residential building starts in 2010 will nearly match 2008’s 75.8 million square feet. The most recent peak occurred in 2007 at 92.1 million square feet.

Most of the gain in 2010 has come from institutional work, with a slight helping hand from commercial. Institutional starts in 2010 will rise to their highest annual level since the 1970s.

Institutional starts are projected at 42.5 million square feet in 2010. That’s nearly as much as 2009 (23.1) and 2008 (23.5) combined. Government infrastructure stimulus projects have played major roles, but so have ground-breakings on three major hospital projects in Quebec.

Those three mega medical facility projects have been: (1) a new state-of-the-art medical centre at McGill University in Montreal (4.2 million square feet); (2) Centre hospitalier CHUM also in Montreal (2.4 million square feet); and (3) L’Hotel Dieu de Quebec (2.8 million square feet).

Due to a large number of institutional projects being brought forward in 2010, the institutional category is expected to see an easing in new project initiations to 21.0 million square feet in 2011. They will return to a more normal level again of around 23.0 million square feet in 2012.

Commercial construction will record nearly 30.0 million square feet of starts in 2010. In 2009, the level was 25.3 million. In 2008, national commercial construction starts were 46.0 million square feet and in 2007, 58.0 million. The latter was the most recent cyclical peak.

Among commercial sub-categories, two of the three largest percentage gains resulted from a generous public purse: government office buildings (+79%) and recreational buildings (+37%). Only retail and wholesale service starts (+31%) excelled among privately-initiated work.

Beginning in 2011, private sector financing will tentatively and slowly return to the marketplace to supplant the decline in spending from the public sector. Relatively normal cyclical pick-ups will raise commercial project starts to 36.5 million square feet in 2011 and 47.0 million in 2012.

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