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Don't be deceived by results for construction by district.

Don't be deceived by results for construction by district

Last year's ups and downs in construction for the various regions of Northern Ontario should be taken with a grain of salt, says an expert in the statistical game.

That appears a reasonable caution considering, for example, that last year the value of industrial construction in Thunder Bay was 4,000 per cent more than in 1988.

Such changes, either up or down, are possible because just one large project can cause wild swings in the comparative figures, explains Alex Carrick, an economist/editor with CanaData in Toronto.

"The problem is the numbers are not that high to begin with," says Carrick.

CanaData is a statistics-gathering and information service of Southam Business Information and Communications Group Inc.

Carrick says construction numbers are only significant in provincial terms.

The numbers show a 27-per-cent decrease in the value of construction throughout Ontario last year.

"A big chunk of that was residential," says Carrick, noting a 23-per-cent decrease in that sector.

He attributed the drop to high interest rates and a slowing of migration from other provinces, particularly from the West.

Interest rates finally put the cost of housing behind a "roadblock" which prevented many people from purchasing a home, Carrick adds.

In the commercial sector, there was a 14-per-cent decrease in the value of construction in 1989, mostly in recreational developments.

In the institutional sector, there was a 36-per-cent decline. Carrick explains that institutional construction, such as hospitals and schools, suffered from government spending restraints.

In the industrial sector, there was a large drop of 60 per cent in terms of total value.

"It's really fairly logical," says Carrick. "1988 was just a huge year."

With the rise in interest rates last year causing a downturn in residential construction, dependent manufacturing sectors suffered, he says.

The value of engineering services was down 25 per cent from the previous year.


"The numbers in Thunder Bay were mostly quite positive," says Carrick.

Along with a large hike in the value of industrial construction, commercial construction was up one per cent and the value of engineering services was up 111 per cent from 1988. However, the value of residential construction decreased 81 per cent and institutional construction was down 46 per cent.

The 4,000-per-cent increase in the industrial sector was mainly caused by construction of a $75-million manufacturing plant. On the other hand, the decrease in the institutional sector was caused by the lack of any project comparable to the large government office building constructed in 1988.

For metropolitan Thunder Bay, the figures indicated a 56-per-cent increase in the total value of construction from the previous year.

In Thunder Bay district, the number of construction projects plunged from 784 to 253. However, the value of the work increased to $211.57 million from $127.12 million in 1988.


In the Nipissing district 125 construction projects valued at $42.8 million were undertaken last year. It was a considerable drop from 1988 when 212 projects worth $65.5 million were undertaken.

In the Parry Sound district 258 projects worth $30.4 million were undertaken in 1989. It was a slight decrease from 1988's total of 274 projects worth $30.5 million.

There were five projects worth $3.3 million undertaken in the Manitoulin district last year compared to 27 projects worth $4 million the previous year.

In the Timiskaming district 20 projects worth $15.5 million were undertaken in 1989 compared to 47 projects worth $87 million in 1988.

The number of projects increased to 295 from 229 in the Cochrane district. However, the value of the projects dropped significantly to $36.5 million from $61 million.

In the Algoma district the number of construction projects decreased to 501 from 682. The value of construction decreased to $92.4 million from $133 million.

The value of construction projects more than doubled to $63.7 million from $26.8 million in the Rainy River district. However, the number of projects fell slightly to 72 from 77.

The biggest decline in the value of construction occurred in the Kenora district. The 1989 figure of $103 million was less than half 1988's total of $214 million. The number of projects decreased to 161 from 296.


Carrick said it is only possible to predict this year's results on a province-wide basis. The predictions are also in square footage.

For the commercial sector CanaData predicts a drop to 26.7 million square feet from 32 million square feet. It predicts a drop to 7.5 million square feet from 7.8 million square feet for the institutional sector and an increase to 10 million square feet from 9.8 million square feet for the industrial sector.

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Title Annotation:Construction Report; Northern Ontario
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:May 1, 1990
Previous Article:Earlton firm expands, adds new equipment.
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