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Bryan Yu: B.C. housing starts rebound, manufacturing sales drop sharply

Multi-family starts surge 64.7%, offsetting single-family decline
Among B.C.’s seven largest urban areas, five reported higher housing starts in February.

B.C. housing starts rebounded in February after a weak January. On a seasonally adjusted and annualized basis, starts rose to 44,437 last month. This marks a 53.5-per-cent monthly increase and is slightly above the average of the last six months. Multi-family starts increased 64.7 per cent to 39,852 while single-family starts decreased 3.7 per cent to 4,585 units. Activity in B.C. drove the national gain of 15 per cent.

Among B.C.’s seven largest urban areas, five reported higher housing starts in February. Vancouver bounced back with a 79.4-per-cent increase to a seasonally adjusted, annualized rate of 32,846. This is similar to the monthly average seen last year. Victoria had a 47.9-per-cent increase to 3,319 housing starts. Despite the increase, it is well below last year’s monthly average of around 5,000 units. Kelowna saw 4,218 housing starts, well ahead of the area’s 2023 monthly average of 2,950 starts.

In a year-over-year comparison, unadjusted housing starts in B.C. increased by 30 per cent, up from 2,787 in February 2023 to 3,620 in February 2024. The number of single-family home construction starts decreased, with only 306 units started this February compared to 375 units last February—an 18-per-cent decline. This is likely because developers still expect the higher end of housing markets to lag, despite the anticipation of lower interest rates. Meanwhile, multi-family unit construction starts increased, up from 2,412 units in February 2023 to 3,314 units in February 2024, representing a 37-per-cent increase.

January manufacturing sales in B.C. reported a sharp decline of 5.1 per cent when compared to December— a pause to the growth momentum seen since September 2023. On a seasonally adjusted basis, the dollar amount of sales in January was $5.32 billion, down from December’s $5.61 billion in sales. Monthly sales in non-durable goods industries fell 1.9 per cent, and sales among durable goods industries declined 7.8 per cent. On a year-over-year basis, B.C. manufacturing sales were 3.7 per cent below where they were in January 2023.

Within the durable goods industries, monthly declines were seen across most categories, except electrical equipment, appliance and component manufacturing, which saw a decrease of 14.9 per cent, and furniture manufacturing, which saw a decline of 1.9 per cent. Following December’s large decline in manufacturing sales, wood product manufacturing in B.C. reported a 7.7-per-cent decrease in January. Primary metal product manufacturing experienced a decline of 5.9 per cent, fabricated metal product manufacturing saw a significant decrease of 21.2 per cent and transportation equipment manufacturing decreased by 3.9 per cent. On a yearly basis, both durable goods (down 4.4 per cent) and non-durable goods (down three per cent) posted lower manufacturing sales this January.

Within the Vancouver metro area, manufacturing sales dropped 1.8 per cent for the month of January, with durable goods industries down 2.6 per cent and non-durable goods industries down 1.1 per cent.

Bryan Yu is chief economist at  Central 1.