Construction activity on Vancouver Island remained robust during the fourth quarter of 2017 pushing overall levels for the year up by 23 per cent to a record high, according to the latest report from the Vancouver Island Construction Association (VICA).
“In 2017, Vancouver Island’s building boom surpassed all previous years reaching a total dollar value of $2.239 billion,” said Rory Kulmala, VICA chief executive officer. “Employment in the construction industry also rose island-wide, with most of the gains occurring outside the Victoria metro area.”
All regional districts on Vancouver Island, except for Alberni-Clayoquot and Comox Valley, had more building permits issued during 2017 than in 2016, with the Capital Regional District seeing a 36 per cent gain year over year. Residential permits rose by 23 per cent to a record high of $1.708 billion while non-residential permits rose by 21 per cent to $530.4 million — just shy of the 2009 high. The main driver behind the non-residential building activity was a rise in institutional-government permits.
In contrast, during the fourth quarter of 2017 building permits fell by 19 per cent, largely the result of a 25 per cent decline in non-residential permits and a 17 per cent drop in residential permits. Building permits typically weaken during the fourth quarter from the third quarter due to the seasonal effect.
“The outlook for the island’s construction industry is positive for 2018 with economic and population growth fueling the demand for residential and non-residential space,” said Kulmala. “With expanding building activity, limited labour supply and rising input costs, total construction costs will look to rise at a faster pace, although the forecast remains bright.”
Non-residential building construction has more room to expand with the island’s improving local economy. Market conditions for office, retail, and industrial space are conducive for new investments while more government building projects are also on the horizon.