Construction

heavyequ.jpg (25435 bytes)The construction industry is enjoying a relatively good year despite the drop off in activity related to the Hibernia project, which had buoyed the sector for the past several years. A wide array of projects in various industries has contributed to the sector's favourable performance. Construction employment during the first 11 months was up 5.5% over the same period last year.

Non-residential

Non-residential construction activity is benefiting from a number of factors. Continued development of the oil industry, particularly the Terra Nova project and the transshipment facility at Whiffen Head, provided a stimulus to the industry this year and is expected to be a driving force again next year. Public sector road and building construction has positively impacted the industry. As is the case nationally, strength in retail sales and competition among retailers is spurring commercial construction and renovation.

Residential

Housing investment, according to the latest Public and Private Investment Intentions Survey conducted by Statistics Canada, is expected to rise by 6.9% over the 1997 level. Rising investment, despite an expected decline in housing starts, is indicative of an ongoing shift in the composition of housing investment, from new construction to renovation expenditures. Renovation includes home improvement and repair as well as conversion of existing structures into dwellings such as condominiums.

Housing starts for the Province fell during the January to September period by 6.8%. Rural starts rose while urban starts fell. A surge in rural home construction during the second quarter tempered declines in the first and third quarters, resulting in a rise of 1.3% in year-to-date starts. While rural housing starts are up slightly in the January to September period, expectations are that they will be down for the year as a whole reflecting high levels of out-migration.

New home construction in urban areas fell 10.8% in the January to September period compared to the same period a year ago. Weakness was experienced in all urban areas with the exception of the Gander region. The St. John's CMA, in particular, recorded a substantial decline. Homebuyers taking advantage of an ample supply of existing homes available at competitive prices provide some explanation for weak home building in urban areas. Year-to-date sales of existing homes recorded through the St. John's and Central Newfoundland Real Estate Boards are up by 5.2% over last year.

In terms of total investment spending, Newfoundland and Labrador is anticipated to record growth of 6.7% in 1998. A low interest rate environment and generally positive economic conditions in the Province (rising employment, retail sales, good resource prospects) should give rise to new construction that will augment the growing list of commercial, infrastructure and resource projects already underway

Major Projects Boost Construction Industry
Selected Examples

Transportation: Outer Ring Road (St. John's)
Trans Labrador Highway (Labrador)
Oil & Gas: Terra Nova Project
Transshipment Terminal (Whiffen Head)
Commercial: Sobey's (St. John's)
Dominion (St. John's)
Summerville Plaza (St. John's)
Institutional: Hospital Redevelopment (St. John's)
Hospital (Happy Valley-Goose Bay)
Educational: University Centre (St. John's)
Electric Utilities: Star Lake Hydro-electric (southwest of Buchans)

Contents Previous Next