According to recent research conducted by the Ontario Construction Secretariat, new data from Statistics Canada has shown that construction employment in Ontario continues to reach new record highs, breaking the previous record from May.
The data additionally reveals that the labour force also continues to grow to record size, and unemployment continues to remain low. In contrast, permit values decreased across all sectors month-over-month (June 2022-July 2022) and year-over-year (July 2021-July 2022). However, overall ICI year-to-date permit value in July was slightly higher than last year.
Labour force numbers reached consecutive record highs in June and July, with 621 and 628.3 thousand participants respectively. August numbers remained the same as July. Similarly, employment numbers also climbed to a record high in June to 601.3 thousand, and again in July to 614.9 thousand. In August, employment decreased slightly to 612 thousand.
Unemployment rate was also low throughout the summer. In July, the rate dropped to 2.1 per cent, the lowest rate since September 2018 (1.9 per cent). The rate went up slightly in August to 2.6 per cent, which was still lower than any other monthly unemployment rate from 2019 to present.
The unemployment rate in Ontario’s construction sector is also much lower than the average rate for all industries (6.3 per cent as of August), further demonstrating the strength of employment in construction relative to the rest of Ontario.
Total permit value in ICI construction was down 32.6 per cent from June to July of this year (from $1.90 to $1.28 billion), and down 25.1 per cent from July 2021 to July 2022 (from $1.71 to $1.28 billion).
In the industrial sector, permit values increased from March to April by about 14 per cent and remained relatively stable from April to June ($484.7-461.9 million). Between June and July there was a 45 per cent decline down to $253.3 million. In the commercial sector, permit values fell from March to May ($760.0-592.9 million), before rising sharply in June to $1.1 billion (a month-over-month increase of 88.3 per cent). From June to July, values fell by 23.3 per cent to $856.6 million (still higher than levels in March). In the institutional sector, permit values increased from March to May to reach a peak of $434.2 million, before falling to $317.8 million in June (-26.8 per cent) and $168.4 million in July (-47 per cent).
Year-over-year changes in July, however, were all negative. Commercial permit values decreased -10.5 per cent (from $956.5 to 856.6 million), industrial by -25 per cent ($337.6 to 253.3 million), and institutional by -59.1 per cent ($412 to 168.4 million). The drop in permit values in July (both compared to July 2021, and June 2022) across all sectors may be in part due to the interest rate announcement in July, where the target rate jumped 100 points (1 per cent), the largest hike since 1998.
In contrast to the negative month-over-month and year-over-year changes seen in July, year-to-date permit values from Jan-July were mostly positive when compared to the same period in 2021. Overall year-to date building permit value was up 10 per cent; up 2.9 per cent in the commercial sector, 57.2 per cent in the industrial sector, and down 12.7 per cent in the institutional sector.