In the first installment of this series on investment activity in Northern Ontario as measured by building permit data, we saw that building permit values in the north have ebbed and flowed with an overall flat performance over a 35-year period. In this installment, I want to compare Northeastern and Northwestern Ontario in two ways: first, comparing their long-term trends in the real value of permits and second, comparing the composition of building permits across the categories on residential, industrial, commercial and institutional/governmental.
Figure 1 plots the real total value of building permits and while the ebb and flow of activity is there, the long term trends as depicted by the linear trend are markedly different across the two regions. The Northeast exhibits a rising trend which albeit weak is infinitely preferable to the long term decline exhibited by the Northwest trend line. Figures 2 and 3 plot the composition of the permits in 1976 and in 2011. In 1976, the Northwest has a larger share of industrial permit activity compared to the Northeast while both had comparable shares of residential activity. Compared to 1976, 2011 shows a decline in the residential shares of permit activity in both regions as well as an increase in the share of institutional and governmental permits. In 1976, the public sector accounted for 8 and 5 percent of investment activity respectively in Northeastern and Northwestern Ontario. By 2011, those shares had risen to 21 and 12 percent respectively. It would appear the Northeast has been able to secure more public sector investment than the Northwest.
The industrial share has declined in both regions but it is surprisingly still quite high in the Northwest - perhaps an indicator of the recent surge of activity in the Ring of Fire. The residential share has declined in both and indeed a big driver of the flat performance overall in new investment over 35 years has been the weak residential sector. Both regions show an overall downward trend in the real value of their residential permits over the 1976-2011 period though the northeast has shown some recovery since 2000.
Figure 1
Figure 2
Figure 3
