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Construction activity levels off after past year's 'dramatic' hike.

Construction activity levels off after past year's `dramatic' hike

Dramatic increases in construction activity were recorded for the past year in Sudbury.

All sectors of the construction and building industry enjoyed a growth level which far exceeded predictions made in 1988, said Bernie Fransen, director of building control for the Region of Sudbury.

Fransen explained that substantial growth occurred in all areas, including commercial, industrial and institutional. The highest level of growth occurred in the residential sector.

Admitting that residential construction is the most active sector, Fransen said that this was particularly noticeable in 1989.

The growth in this sector was "excellent," he said. "It far exceeded everyone's expectations."

Fransen reported that $108 million worth of residential construction occurred in the region during 1989. This figure represents an increase of $34 million over the previous year.

A further $12 million was recorded for accessories and additions to existing residential properties.

According to the region's figures, in 1988 1,264 dwelling units were created. This number rose to 1,403 in 1989.

"Although we were optimistic in our predictions, we never imagined that it would proceed beyond all expectations the way it did," he said.

The record activity noted in the residential sector was mirrored by record levels of growth in both institutional and industrial construction.

The only sector which seemed to wain somewhat in 1989 was commercial development, said Fransen. However, this sector experienced a substantial increase in 1988.

Fransen said the "levelling off will allow developers to finish off some of the projects started in 1988."

"It appears that this sector didn't have the steam the others did, but we are still looking at the areas which will blossom in 1990.

"The potential for commercial growth is ever-present," he said.

This potential growth was realized in both the industrial and institutional sectors of the Sudbury construction community last year.

In 1989 permits for institutional construction numbered 65, representing a total value of $38.2 million, or an increase of 58 from 1988.

An increase was also recorded in the number and value of industrial building permits issued in 1989 over '88. The permits issued in 1989 represented a value of $6 million.

The totals for permits issued in both categories include permits for accessories and additions to existing structures.

Fransen said the amount of new construction as well as renovation work across the four sectors totalled approximately $202 million, an increase of $64 million over the previous year.

Fransen believes this "dramatic growth" indicates a "substantial confidence in the community."

These growth trends, according to Fransen, are not limited to Sudbury Region. He explained that the same increases are prevalent in most major northern centres.

Although admitting that there will inevitably be a levelling-off due to such factors as increasing interest rates, Fransen predicted the momentum will continue for most of 1990.

"If the first two months are any indication, the momentum should remain well into this year," he said.

The momentum is continuing despite the fact that the value of construction permits issued to date this year is less than the value of the permits approved during the same period last year.

As of February (the latest figures available), building permits worth $22.9 million were approved, compared with approximately $30.2 million during the first two months of last year.

Fransen maintains, however, "there has been no let up yet."

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Title Annotation:Construction Report; Sudbury, Ontario construction, 1989
Author:McDougall, Douglas
Publication:Northern Ontario Business
Date:May 1, 1990
Previous Article:Public, private sectors combine efforts to market industrial land.
Next Article:Slowdown predicted in Timmins after 10-year high.

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