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Industrial construction slows in most major centres.

Industrial construction slows in most major centres

With the exception of Sudbury, all major Northern Ontario centres are reporting reduced construction levels in the industrial sector.

Building officials say that the positive activity of the past five years has started to subside due to high interest rates and the recession.


In North Bay permits were issued for only $1.3 million worth of new industrial construction in 1990, and no increase is expected this year.

"I don't anticipate any large industrial building this year," said Rolf Vasbotn, the city's chief building official.

Most of the permits issued for new industrial construction last year were for "small industrial undertakings," he added.

However, the building department did issue a substantial number of permits last year for renovations and additions in the industrial sector.

Vasbotn said the city issued permits for renovations and additions worth approximately $7.4 million during 1990, and he expects similar activity this year.

"It's pretty hard to anticipate, but it appears it will be the same," he said.


No permits were issued for new industrial construction in January or February in Sault Ste. Marie.

"There is just not a lot of activity (in new industrial construction)," said Syl Allard, the city's chief plans examiner.

Allard attributes the absence of new construction in this sector to three key factors - the uncertain future of Algoma Steel, high interest rates and the recession.

The total value of additions and alterations to industrial facilities in 1990 was $73,000, with the bulk of the permits being issued for tenant improvements at the industrial mall on Black Road.

Allard said that it is far too early to predict the outcome of this year.

"I don't have a line on a lot of projects, but it doesn't look as high as 1990."


Due mainly to Inco's determination to upgrade its operations and meet provincial sulphur dioxide emission guidelines, the value of the building permits issued during the first two months of this year was more than five times the value of the permits issued during the same period last year.

The company is in the midst of a $500-million retrofit of its operations in Sudbury.

According to building department permits issued as of February totalled $25.9 million. At the same time last year the department had issued permits valued at $4.1 million.

The city's director of building controls, Bernie Fransen, is certain that his department will be requested to issue even more permits before the end of year.

"We have had two record years. There has been a shift in the kind of construction work from residential/commercial to heavy industry," he said.

However, if it were not for activity in the extractive (mining) portion of the industrial sector, Fransen said that the sector would no doubt experience a reduction in construction values.

"We have been experiencing a slight decrease from '90 values," he said.

Permits issued for new industrial (other than extractive) construction as of February were valued at $500,000, compared with $863,000 for the same period last year.

Despite the decrease, Fransen said "Sudbury can still expect some growth in the industrial sector."


Timmins has enjoyed three consecutive years of record growth in its industrial sector. However, its anticipated that there will be a slowdown in 1991.

"There doesn't seem to be much on the horizon," admitted Ron Peterson, the city's director of planning, building and maintenance.

More than two-thirds of the new development over the past three years was attributed to mining industry-related construction. The activity has since levelled off due to current economic conditions, said Peterson.

He said the activity actually started to slow down last year, when the city issued only three permits valued at $900,000 and three renovation-related permits valued at $1.2 million.

"It simply dried up, which is probably a reflection of the economy," said Peterson.

As of the end of February, the building department had issued no new construction permits and no permits for renovation-related construction.


Although Thunder Bay did not have a single industrial construction project worth more than $1 million last year, building officials reported strong overall results.

Building officials issued 26 permits for new construction worth slightly less than $5 million, and they expect similar results this year.

However, according to Jim Buie, co-ordinator of plans examination for the city, it is far too early to tell for sure.

As of March 1 two permits worth $610,000 were issued, compared to only a single permit worth $16,000, during the same period last year.
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Title Annotation:Report on Construction
Publication:Northern Ontario Business
Date:May 1, 1991
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