June 18, 2024

Windsor remains one of Canada’s hottest area’s for construction

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For the second consecutive month, the Windsor area saw over $300 million worth of building permits issued in March, making it one of the busiest regions for building in the nation.

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Only Canada’s five largest cities — Toronto, Montreal, Vancouver, Calgary and Edmonton — exceeded the March total of $371 million in permits. Combined with February’s total of $308 million, the Windsor area has issued building permits worth $679 million in the past two months, according to the latest Statistics Canada figures.

The Windsor region also ranked second in Canada in the percentage increase (178 per cent) in building permit value between March 2022 and March 2023.

“We’d have to go back to 1995 or 1996 to find a comparable period,” said Windsor Construction Association president Jim Lyons.

“Per capita, we’re kicking everyone’s butt. It doesn’t really come as a surprise. We all know things are happening with the bridge and the battery plant.”

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Lyons said the bulk of the local permit value is being driven by activity in industrial, commercial and institutional construction sectors.

In addition to the area’s two mega-projects, there are significant-sized supplier plants under construction, expansions/modifications of existing firms and plenty of infrastructure projects underway.

“I think during the pandemic a lot of projects were on the books, but people were just waiting to see how things would play out,” Lyons said.

“As things begin to normalize, material costs are settling and supply chains are filling up again, many of those projects are moving forward. It’s a bit of pent-up demand.”

Non-residential construction is also driving the growth nationally as permit values in March rose 32 per cent to a record $5.2 billion. The $13 billion recorded for the first quarter of 2023 is also a record.

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In Ontario, non-residential construction rose 22 per cent to $2.1 billion in March.

‘We’re kicking everyone’s butt.’ The construction site of the Dongshin Motech plant in Windsor is shown on Thursday, May 11, 2023.
‘We’re kicking everyone’s butt.’ The construction site of the Dongshin Motech plant in Windsor is shown on Thursday, May 11, 2023. Photo by Dan Janisse /Windsor Star

It’s a much different story for residential construction in March.

That sector saw a decline of 0.9 per cent nationally to $6.6 billion with permits issued for 21,400 new dwellings. The permit value of Ontario home construction shrunk by 8.1 per cent to $247 million.

It was the continuation of a national pattern seen throughout 2023 as residential construction permit value was down 1.6 per cent at $19.4 billion.

Windsor Essex Home Builders’ Association vice-president Brent Klundert said the Statistics Canada report generally reflects the local new home construction market. However, Klundert noted the sales trends have been up since the start of the new year, not down as is happening elsewhere in Canada.

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“Individual homeowners are more sensitive to interest rate hikes than companies,” Klundert said. “The industrial, commercial and institutional projects are definitely driving the bus right now, locally.

“However, the future is bright. Residential will follow all that new construction.

“We’re seeing steady improvements now. The resale home market is improving too and that’s narrowing the price gap between the resale and new homes’ markets.”

The pace at which the construction industry is operating is putting increasing strain on a workforce that lost some key skilled trades people to retirement during the COVID pandemic.

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Lyons said replacing such experienced talent is a long and time-consuming process. He said contractors are even paying above contract requirements to retain the employees they really value.

“Your projects will get built, it’s just going to take longer,” Lyons said.

“We’re telling clients to expect a project to take one-third to half longer than it used to take. There’s a cost factor to that and clients aren’t always aware of that. It’s been hard for architects and planners to estimate for that.”

Klundert said build timelines for a new home have come down from the 200-plus days it was taking during the pandemic. He said the average home his company builds now takes 180-200 days.

“It used to be 120 to 150 days from shovel into the ground to the owner taking possession,” Klundert said.

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