New home builders predict continued industry strength

Canadian home builders are predicting a continuation of solid strength in their industry, according to the Winter 2001/2002 Pulse Survey of new home builders and renovators.

Home builders are predicting 156,000 new units nationally in 2002. These expectations are in line with Canada Mortgage and Housing Corporation’s forecast of 155,800 starts in 2002.

This prediction, down from about 162,700 units in 2001, is strong given the current economic conditions. In most regions, 2002 starts are still expected to be above the average annual levels of the second half of the 1990s.

Trade and labour shortages remain the top concern for home builders. These shortages are most often found for framers, carpenters, bricklayers and drywallers.

The majority of new home builders expect their costs to increase over the next year in the areas of trades, labour and building materials (excluding lumber). More than half of new home builders also believe costs of serviced lots and development charges will increase over the next 12 months.

As a result of these increased input costs, the majority of new home builders expect new single-detached house prices to increase over the next year.

A related survey of the CHBA's building product manufacturer members also reported an increase in input costs last year. About two-thirds of the companies reported higher input costs in 2001, and about 40 per cent experienced increases of more than five per cent.

While input costs remain a concern for some building product manufacturer members – with 45 per cent expecting a modest increase in input costs in 2002 – severe competition in the building product industry, labour problems and internal company issues are higher concerns.

The Pulse Survey also revealed that consumer confidence has increased as a concern among new home builders. The survey shows concern is most prevalent in Ontario where 21 per cent cited consumer confidence as a critical problem.

The survey also found that more home builders are considering building rental housing. Twenty-six per cent of respondents said they are seriously considering building rental housing, up from 22 per cent in the last Pulse Survey, released in August 2001. Interest in building rental housing is highest in Atlantic Canada and Quebec.

About one in 10 new home builders built some rental housing units in the past year. These builders built an average of nine rental units.

Job opportunities have continued to grow in the home building industry. Increased full-time employment was reported in most parts of the country. Part-time employment was higher than a year ago in all regions, except Quebec.

Builders also revealed that their use of the Internet and the number of company websites have been growing. About five in six Canadian builders report they have access to the Internet. The number of builders with a company website has grown over the past year, from 40 per cent to 50 per cent.

About the Pulse Survey

The 29th semi-annual Pulse Survey of new home builders and renovators was conducted by the Canadian Home Builders’ Association in December 2001 and January 2002 with the assistance of Canada Mortgage and Housing Corporation and Natural Resources Canada. A total of 316 new home builders and renovators across Canada responded to the survey. Results were tabulated and analyzed for the CHBA by Clayton Research Associates.

About the Canadian Home Builders’ Association

The Canadian Home Builders’ Association (CHBA) is the voice of the residential construction industry in Canada representing more than 6,000 member firms across Canada. Membership comprises new home builders, renovators, developers, trade contractors, building material manufacturers and suppliers, mortgage lenders and other professionals in the housing sector.

About The Author:

Mark Harris is a successful author and regular contributor to http://www.home-n-house-plans.com. A resource for the satellite tv industry featuring information on free satellite systems, the Dish Network and DirecTV.