OTTAWA – The Conference Board of Canada is predicting a rebound in the country’s residential construction industry thanks to increased in demand and prices. Canadian Industrial Outlook: Canada’s Residential Construction Industry and Canada’s Non-Residential Construction Industry- Winter 2010 is predicting housing starts will rise from 147,600 units in 2009 to 180,500 units in 2010.
“Although the residential construction industry experienced a sharp contraction last year, its health is quickly improving. The number of housing starts has steadily improved since bottoming out last spring and prices are expected to reverse their decline,” said Michael Burt, associate director, Industrial Economic Trends.
New home prices are expected to jump by 2.4 per cent this year, with further increases forecast through 2014. Pre-tax profits are projected to increase in lockstep with the increases in demand and prices, climbing from its current four-year low to $2.7 billion in 2010. Those profits aren’t expected to reach their pre-recession levels before 2012, however.
Non-residential construction profits, meanwhile, are expected to continue their slide to a six-year low in 2010.
“Declining spending on commercial and industrial buildings is more than offsetting a rise in spending on institutional structures. Total investment in non-residential construction is expected to fall by 2.3 per cent this year,” said Burt.