Non-residential construction investment in the Abbotsford CMA declined for the ninth quarter in a row in the fourth quarter of 2010, bringing the level of spending to its lowest level since 2001, according to Vancouver Regional Construction Association’s analysis of Statistics Canada’s Investment in Non-Residential Building Construction report.
“As expected, construction investment in Abbotsford has continued to decrease and further declines are expected in upcoming quarters,” said Keith Sashaw, Vancouver Regional Construction Association president. “All sectors declined in the fourth quarter of 2010.”
Total non-residential building construction investment spending in Abbotsford dropped 17.4 per cent to $17.1 million seasonally adjusted in the fourth quarter from $20.7 million in the third quarter 2010.
“For the year 2010, spending declined for the third year in a row and to its lowest level since 2004,” says Sashaw. “Part of the reason for this is the large public spending on the new Abbotsford hospital in 2006, as well as a weaker economy; the hospital project greatly influenced the pattern of spending over the past four years, affecting year-to-date and year-over-year comparisons for the region.”
Total non-residential building construction investment spending is down 41.2 per cent to $89.2 million year-to-date in 2010 compared to $151.6 million in 2009.
“It is too early to predict a sustained turnaround in the region,” says Sashaw. “However, total building construction spending in Abbotstford looks to post a small gain in the first quarter 2011 on the strength of commercial activity”
Construction costs appear to have bottomed, says VRCA. In Abbotsford, construction price inflation also edged lower in the fourth quarter leaving the year-over-year change at -1.0 per cent. Though some building materials and costs are increasing, lumber prices are declining following a resurgence earlier this year and the overall rate of construction costs is likely being maintained by lower labour costs and excess supply of capacity.
“Low building costs continue to be a positive factor as they make investments more financially viable and should help spur the next upturn”, says Sashaw.
Total non-residential building construction investment in Metro Vancouver increased for the second consecutive quarter, says VRCA. Metro Vancouver’s gain in the fourth quarter was across all three activity areas.
With more than 700 members, VRCA is British Columbia’s largest and most inclusive regional construction association, representing union and non-union, general and trade contracting companies, manufacturers, suppliers and other professionals throughout the Lower Mainland from Hope to Whistler.