Housing starts exceeding CCA's forecast.

• Author: Wareing, Andrew
• Position: Construction: special report - Canadian Construction Association

The numbers are not official, but the Canadian Construction Association (CCA) is seeing some highly unexpected highs and lows this year in the construction industry.

"There's a saying that God invented economic forecasters to make weather forecasters look good," quips Jeff Morrison, director of communications for the CCA.

Last November, the CCA was predicting 1.9 per cent growth in the in 2003, 2.6 per cent in 2004, and just 1.3 per cent in 2005.

The CCA reported a strong residential construction market in 2002 was the cause for higher overall growth. Higher expected interest rates and a lessening of demand were predicted to cut into residential growth figures to 2.1 per cent in 2003, with a slight upturn to 2.9 per cent expected in 2004 and then a drop again in 2005 of 1.6 per cent.

Non-residential construction, including institutional, commercial and other construction was expected to record growth in the range of 1.4 per cent in 2003.

Morrison says the association has not compiled its numbers for this year, but some trends are taking place, including a much stronger than expected residential construction market and a weaker-than-expected non-residential construction market.

The continued lowering of interest rates are currently creating a much stronger than expected residential construction industry, he says. Non-residential construction, such as commercial and industrial construction, is expected to be a lot weaker, however, because of the decline of the Canadian economy, the impact of severe acute respiratory syndrome (SARS) on the tourism industry, uncertainty created by the Iraq war and a weakening Canadian dollar impacting export businesses.

"The U.S. economy still hasn't shaken...