OCS Insights: 2018 ICI Building Permit Values Drop Off After 2017 All-Time-High
2018 ICI Building Permit Values Drop Off After 2017 All-Time-High
Ontario’s ICI permit values totalled $13.4 billion in 2018, down 9% from 2017’s record high of $14.8 billion. Despite the modest decline, commercial permit values reached an all-time high of $7.5 billion last year, up 5% compared to 2017. Ontario’s institutional permit values fell by 30% in 2018, while industrial permits fell by 14%. The commercial sector accounted for 56% of total ICI permit values in 2018, while industrial and institutional permits represented about 22% each.
Source: Statistics Canada
Total ICI permit values increased in only four of Ontario’s sixteen metropolitan areas in 2018. Barrie’s ICI permit values nearly doubled (+98%), led by substantial increases in commercial and institutional permits. Oshawa, the only metro area that saw increased permit values in all three ICI sectors in 2018, had an overall ICI permit increase of 63%. Total ICI permit values in Belleville increased by 36% in 2018, led by the institutional sector. London had a 4% increase in ICI permit values, led by its industrial sector.
Toronto’s ICI permit values fell by 11% in 2018, although the commercial sector saw a 5% increase in permit values compared to 2017. Commercial permits accounted for 2/3 (66%) of total ICI permit values in Toronto last year. ICI permit values also had marginal declines in 2018 in Peterborough (-8%), Kitchener-Cambridge-Waterloo (-9%), and St. Catharines-Niagara (-12%). Ottawa’s ICI permit values fell by 10% in 2018, and saw permit values decline in all three ICI sectors.
ICI permit values fell by about 1/4 in 2018 in Windsor (-24%), Hamilton (-26%), and Greater Sudbury (-26%). Guelph’s ICI permit values had a 36% decline in the year. Despite significant declines in total ICI permitting in 2018, commercial permit values in Hamilton, Greater Sudbury, and Guelph all remained at relatively the same level or slightly higher than in 2017. Windsor’s ICI permit values fell by more than 30% in the commercial and institutional sectors, but increased by 14% in its industrial sector.
Permit values declined in all three ICI sectors last year in Brantford, Kingston, and Thunder Bay. Unlike Ottawa though, these three metro areas also saw substantial drops in overall ICI permit values. Brantford’s total ICI permit values fell by 29% in 2018, while Kingston’s fell by 62%, and Thunder Bay’s declined by 69%. It should be noted that significant year-over-year permit value declines in smaller metro areas do not necessarily indicate reduced activity. Small metro areas normally see bigger year-over-year fluctuations in permit values totals, due in part to the greater relative impact of individual projects.
While permit values are a leading indicator of construction activity, the year-over-year declines in ICI permit values observed in 2018 should not be seen as a cause for concern. Put into context, 2018 permit activity in Ontario was coming off an all-time high in 2017 (see graph below). ICI permit values in 2017 were 24% higher than the annual average of the previous six years (2011-2016). Although lower than 2017, 2018’s ICI permit values are still 13% higher than the 2011-2016 annual average. Furthermore, the OCS 2019 Contractor Survey found that 81% of ICI contractors in Ontario are expecting to do more, or the same level of work in 2019 as they did last year.
Detailed graphs showing annual ICI permit totals for the past eight years in each metro area can be found here.
2019 State of the Industry and Outlook Conference
The 2019 Contractor Survey is released as part of the 19th Annual State of the Industry and Outlook Conference held on March 7th at the Metro Toronto Convention Centre.
This informative and well-attended half-day conference hosted by the OCS is where industry experts unravel economic indicators and give insight on where the construction industry is headed in 2019. You can also check out media coverage and photos of the event here.
Updated 2019 Collective Bargaining Toolkit
The Collective Bargaining Toolkit contains a variety of economic, labour market, major project, and other construction related data demonstrating the economic contribution, capabilities and performance of the ICI construction industry. The purpose of the toolkit is to provide verifiable information that will inform the collective bargaining process.
You can download the final version of the 2019 Ontario Construction Secretariat’s Collective Bargaining Toolkit here.
The Ontario Construction Secretariat has a number of upcoming events:
Future Building 2019 will take place May 14th-16th at the EY Centre in Ottawa, Ontario. More than 7,000 students from Toronto and surrounding areas attended last year’s event in Toronto! Learn more at www.futurebuilding.ca/
The OCS’s Annual General Meeting and Conference will be held on September 25-26 in the Blue Mountains. More information available at https://iciconstruction.com/