Dollar tally of construction permits can be deceptive, economist says
Non-residential building construction permits are up in Moncton and Saint John, but a New Brunswick economist says that without knowing where the money comes from, it's hard to judge what it means for the economy.
"If these are private-sector, private business facilities being constructed and not with government money, that's a good thing," said Herb Emery, the Vaughan chair of regional economics at the University of New Brunswick.
"But if this reflects the construction of a new hockey stadium or other public facilities, it's not as clear there's as much going on in the economy as we would like."
Statistics Canada released the third-quarter statistics for investment in non-residential building construction Monday.
Non-residential construction in New Brunswick has totalled $828.2 million over the last four quarters, an increase of 34 per cent over the previous year. In the third quarter, permits were worth $220.4 million.
In Moncton, the value of non-residential construction permits reached $63.1 million in the third quarter, double the amount from the same quarter the year before, when it was $37.7 million.
In a release, the City of Moncton said the total number of permits for the quarter was 395, up from 349 a year earlier.
The permits include new commercial construction as well as institutional permits for renovations at Harrison Trimble High School and the Moncton Hospital.
In Saint John, the total value of permits increased to $47.3 million in the third quarter, up from $23.5 million the third quarter last year.
Overall, Saint John recorded the fastest growth over the last four quarters.
Hard to interpret
Emery said that in general, Statistics Canada numbers have been challenging recently, whether they're labour force surveys or investment surveys.
"A lot of these Statistics Canada numbers make sense for what we would call growth under usual conditions," he said. "We understand how the labour market is operating, but in a stagnant economy like New Brunswick has, we are finding there's a lot of strange things going on."
In the case of construction, there isn't enough detail about the source of the money being spent on projects.
"All we know is there's a bunch of activity going on, but we don't know if it's the good activity or the Band-Aid activity."
This makes it hard for the public to understand the economic situation of the province, he said.
"We've been trying hard to do more of the parsing out of what's public-sector investment versus private sector but it's a real challenge with the data sources available."
