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‘Perfect storm’ of work for Vancouver Island industry

‘Perfect storm’ of work for Vancouver Island industry
Business is booming on Vancouver Island. Data from the Vancouver Island Construction Association (VICA) shows increasing residential activity and a surge in commercial permits.

"Building permits were higher in four regional districts, led by the Capital Regional District with a 64 per cent jump over the first quarter, followed by Mt. Waddington with a 33 per cent increase," said Rory Kulmala, CEO of VICA. "This trend is consistent with the increase in project opportunities in the association's digital plan room."

While staying busy is good for the industry, Kulmala said contractors have had to adjust and more co-ordination and strategy in the future will be needed to keep up with demand. But the industry may be reaching a ceiling.

"There is a bit of a perfect storm going on," he said. "I think the industry is starting to be that hand brake. They are kind of slowing it down. Contractors can only do so much work."

He said contractors have begun to do more conservative bids on projects they know they have the ability to deliver and not spread themselves too thin. With a recent influx of retirements and fewer people entering the trades, labour is becoming a growing concern.

"That may be the single factor that will slow the activity down," Kulmala said.

He said VICA is already working to co-ordinate the industry to better deal with construction demand. He expects construction demand to continue to remain high for the at least the next few years.

"Right now everybody is putting everything out on the street," said Kulmala. "The industry is there to co-ordinate to deliver. They are doing their darndest to do that and will continue to deliver projects."

The total dollar value of building permits issued for the Island in the second quarter rose to $616.4 million, a 38 per cent increase compared to the first quarter of 2017.

Major projects contributing to the building permits issued during this period include renovations at the University of Victoria in the District of Oak Bay, an expansion at Mayfair mall in the city of Victoria, foundation work for a sewage treatment plant in Esquimalt and a new landfill building in Cumberland.

Kulmala said Victoria has around seven towers under construction with several more being planned as well as the Johnson Street Bridge. Duncan is planning to build a new hospital and BC Hydro is doing upgrades to the John Hart Dam. Comox is also in the mix with upgrades to sewage infrastructure planned.

The Island is also in the running to host the 2022 Commonwealth Games which Kulmala said would be another boost.

He added that economic and population growth will continue to support the Island's construction industry throughout 2017 and that he expects residential activity to grow and non-residential activity to broaden out to more areas.

Total building permits in 2017 are expected to increase by about 20 per cent with construction employment up another three per cent or more.

According to VICA, constructions costs will also continue to accelerate and will exceed 2016's rise of slightly more than four per cent.

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