With the hustle and bustle of the Vancouver 2010 Winter Games come and gone, it is time for the industry to gear up for new projects. But with so much invested in completed projects, is there anything left for commercial construction now that the Games are gone?

John Clinkard, a consulting economist for Reed Construction Data, writes, “BC’s most recent Major Projects Inventory indicates that non-residential construction in Vancouver will probably slow [in 2010], due in part to a post-Olympic bust in institutional spending.”

His outlook, while favouring residential builders, remains bleak for commercial projects. “Rising office vacancy rates and a significant number of new projects in the pipeline will likely depress commercial building well into 2010.”

At least there is some good news. A report from the Conference Board of Canada released in March forecasts that residential construction is heading in the opposite direction. Profits in Canada’s residential construction industry will rebound this year, thanks to rising demand and prices, the report says, adding that in contrast, non-residential construction profits are expected to decline to a six-year low.
“Although the residential construction industry experienced a sharp contraction last year, its health is quickly improving. The number of housing starts has steadily improved since bottoming out last spring and prices are expected to reverse their decline,” says Michael Burt, associate director, Industrial Economic Trends.

“On the other hand, the recovery for the non-residential construction industry will be slow to materialize. Declining spending on commercial and industrial buildings is more than offsetting a rise in spending on institutional structures. Total investment in non-residential construction is expected to fall by 2.3 percent this year,” says Burt.

While the recession is easing up in some areas, it’s unlikely that commercial construction will see gains this year. Non-residential construction activity and prices are both expected to fall, according to the Conference report, and industry profits will decline by 19 percent to $918 million in 2010. Although profits will begin to recover in 2011 thanks to increases in industrial and commercial spending, they are not expected to return to their pre-recession peak through 2014.

It could be time for contractors to set their sights on smaller-scale projects (see Industry News, page 23), or on renovating existing spaces (see Chilliwack General Hospital, page 11).

Fortunately, an impending job shortage combined with continuous updates to buildings to meet green standards or seismic codes, should continue to provide job security for many.

And if that doesn’t do it, the immediate major renovations to BC’s Olympic-sized venues that are here to stay should give the construction industry in BC enough work, at least for the next few months. The Olympic Village is swiftly being turned and sold as individual residences, and conversion of the Richmond Olympic Oval into a sport, health, and wellness centre, is nearly finished.

But if it’s a building that isn’t required immediately, contractors of commercial buildings could be stuck waiting for their next brand new project.