ONTARIO REGIONAL PERMITS UPDATE
In the first quarter of 2016, industrial permit issuance trended lower than its year-ago level. At a mere $2 million, the value of permits was below the “typical” first quarter amount. The Northeastern region had a much larger fall in building intentions, compared to the Northwestern region. The province announced that they would be providing Timmins with $2.5 million for their new industrial rail park, which will help with the mediocre first quarter results.
Commercial permit values increased year-over-year to sit at $42 million – an almost 50% increase from Q1 2015. The Northeastern region posted a solid increase, while the Northwestern region had a decrease in building intentions. Sudbury contributed to over half the commercial building intentions in Northern Ontario by issuing $29.2 million in permits.
The value of institutional permits climbed higher than its year ago level, halting the downward trend from the previous year. The Northeastern region posted a 68% increase over the same period last year by issuing permits valued at $22.7. Although the Northwestern region saw a significant increase over their Q1 2015 building intentions, the actual value was still low at just $2.6 million. The expansion and modernization of the Atikokan General Hospital, as well as a new health unit in North Bay will help further institutional activity in the North.
In Q1, the value of industrial building permits jumped 688% year-over-year to their highest level ever. The gain was primarily driven by Ottawa thanks to the Confederation Line, the largest infrastructure project awarded in the history of the city as well as the Combined Sewage Storage Tunnel. Meanwhile, permits were record high in Kingston/Pembroke in midst of ongoing construction at the Napanee Generating Station. Such large strength in building intentions promises a healthy industrial market this year.
Over Jan-Mar, the value of commercial permits was close to 45% higher than its year ago level, coming in at an above average $199 million. There was a solid gain in both Ottawa and Kingston-Pembroke. Commercial investment is currently strong in Ottawa thanks to the expansion of the Ottawa Art Gallery and redevelopment of Arts Court.
Institutional permit issuance was essentially the same as its 2015 first quarter level, coming in at $76.7 million. Eastern Ontario continues to unwind from the massive 2014 level related to the Providence Care Hospital. Ottawa represents the vast majority of the institutional permits issues in Q1, thanks in part to the University of Ottawa Heart Institute expansion. In Kingston-Pembroke, the value of institutional building intentions was below average, indicating the market is soft.
First quarter industrial permit issuance increased year-over-year to sit at $249 million – the highest level since 2007. This is consistent with upward trending capacity utilization and suggests that industrial building construction may remain solid over the next few quarters. The primary driver of the gain is related to transit infrastructure work including the Eglington Crosstown. With Metrolinx activity continuing into 2021, this signals industrial investment could remain busy going forward.
Commercial building intentions climbed slightly in the first quarter of 2016 from their year-ago level and remained solid at $863 million. Close to five million square feet of office space is currently under construction in the GTA, with approximately two million slated for completion this year (most of which has been pre-leased). A test for the GTA office market will be how well the currently occupied space is leased once tenants move into their new facilities.
Over Jan-Mar, the value of institutional permit issuance jumped 86% year-over-year to their highest level since 2013. The primary driver of the gain was St. Michael’s Hospital building of the Peter Gilgan Patient Care Tower which is undergoing major renovations. Other major ongoing projects include the Peel Memorial Centre for Integrated Health and Wellness.
Industrial permit issuance eased in the first quarter of 2016 but remained at a solid $100 million. The Hamilton/Niagara region and Muskoka/Kawarthas region both posted a decrease in building intentions. The Kitchener/Waterloo/Barrie region was the only area to post an increase in Q1, continuing its upward trend from the past three years. With plans to extend GO service to the Waterloo region and continued upgrades to the Niagara reservoir, industrial building intentions are likely to remain strong and possibly increase in the near future.
The value of commercial permits issued dropped to its lowest first-quarter level since 2004. After three years of declines, Muskoka/Kawarthas had a modest increase in building intentions, while Kitchener/Waterloo/Barrie and Hamilton/Niagara both experienced decreases in this period.
Institutional building intentions started the year off with a record $138 million, the highest first quarter since 2004. Continued work on the Cambridge Memorial Hospital, as well as ongoing and new work at universities located in the region contributed to this gain. All three areas within Central Ontario had solid gains in institutional permits.
In the first quarter of 2016, the value of industrial permits issuance trended higher than the first quarter 2015 largely thanks to increased activity in London and Stratford/Bruce. London has various multi-million dollar infrastructure projects scheduled for this year and work in the Bruce have boosted industrial permits. Windsor/Sarnia saw a substantial decline year-over-year in Q1 industrial permits, largely due to the Chrysler retool that fueled Q1 permits last year.
The value of commercial permits climbed higher year-over-year in the first quarter, though were still relatively low at $87 million. London and Stratford/Bruce both had substantial increases in commercial permits, while Windsor/Sarnia had a drop. Some key projects in London are new retail facilities (Lowes and Sobeys) and major renovations to Cadillac Fairview’s Masonville Place.
Institutional building intentions increased year-over-year to sit at $79 million – an above average level and the highest first quarter since 2012. London accounts for the majority of the institutional activity in the region with just under $70 million of permits issued in Q1, an increase of 40% over the same period last year. London area projects include the Southwest Community Centre, scheduled to begin construction this summer, and several construction projects at Western University.
FOR MORE INFORMATION, CONTACT:
Director of Research,
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222