What do Building Permits tell us?

Fact Sheet on Construction Employment: June, 2011

Lower Mainland Region

Construction Employment is typically an indicator of coming real estate activity. Here are the latest numbers collected by Stats Canada and our analysis of them.

If you have comments or questions, contact Andrew Peck, Managing Broker at apeck@royalpacific.com.

“A third consecutive month of solid gains in regional construction employment puts it practically at pre-recession levels. This is the largest three-month gain on record at 22.0 thousand persons (record begins in 1996).  The employment surge in the past four months at 26.4 thousand persons is without precedence.” Andre Peck, Managing Broker 

Monthly Numbers

• Construction employment climbed 6.5% in June from May in the Lower Mainland region. Year-over-year employment increased 18% or 19,900 persons. Year-to-date employment was 9.4% higher.
• Metro Vancouver construction employment increased 5.2% to 109.6 thousand persons in June. Year-over-year employment was up 22%. Year-to-date employment was 10.1% higher. 
• Compared to June 2011, employment province-wide increased 7.9% or 15,500 persons. Year-to-date employment was 4.0% higher than last year.

Analysis

• A third consecutive month of solid gains in regional construction employment puts it practically back at pre-recession levels. This is the largest three-month gain on record at 22.0 thousand persons (record begins in 1996).  Taking into account the above-normal gain in March 2011, the employment surge in the past four months at 26.4 thousand persons is without precedence. 
• Metro Vancouver employment also a large gain in June and for the first time was above the pre-recession high of 107.7 thousand set in November 2008. Vancouver’s three-month gain is the largest on record at 18.7 thousand. 

Outlook

• Under construction levels in non-residential and residential buildings are at their highest levels since 2008 and residential renovation spending is picking up again after the federal tax credit ended about one year ago. Engineering construction in the region is difficult to quantify but there are large transportation projects underway.
• Building permits, an indicator of future under construction activity, are up 15% so far this year with large gains in the non-residential sector.  Private investment in commercial and industrial buildings is a new source of growth while public spending is high but set to decline. 
• Housing is generating a moderate level of construction activity.  Under construction levels (residential now being built) in Metro Vancouver are 27% higher than last year. 
• For 2011, regional construction employment is revised upward to 7% at 115.6 thousand from 108.0 thousand in 2010.

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