KEY BUDGET DRIVER FORECAST 2013-2014
Key Budget Driver:
Indicator:
Prepared by:
Construction
Medical, Lab and Research Equipment
Supplies and Chemicals
Annual % Change
Supply Management Services
SECTION A: INDUSTRY/SECTOR TRENDS
Construction
1. Non – Residential Building Construction - Price Index
Statistics Canada released its Non-residential Building Construction Price Index1on February 14th 2012 for
the 4th Quarter 2011. The Edmonton composite price index for non-residential building construction
indicates a 4.1% increase to 163.5 from 157.0 year over year for the period 4th Quarter 2010 to 4th Quarter
2011. There has been an increase of 0.8% in the index from 3rd Quarter 2011 to 4th Quarter 2011 with the
Edmonton index rising from 162.2 to 163.5.
NON – RESIDENTIAL BUILDING CONSTRUCTION - PRICE INDEX
Relative
Q4
Q3
Q4
Q3 to Q4
Q4 2010
importance
2010
2011
2011
2011
to
Q4 2011
(2002=100)
% change
Canada Composite
100
142.4
147.4
148.3
0.6%
4.1%
Halifax
2.6
137.9
141.1
141.7
0.4%
2.8%
Montréal
13.1
137.5
141.2
141.6
0.3%
3%
Ottawa–Gatineau,
5.4
146.2
153.4
154.1
0.5%
5.4%
Ottawa part
Toronto
35.3
143.2
149
150
0.7%
4.7%
Calgary
16.8
160.4
165.3
166.7
0.8%
3.9%
Edmonton
13.4
157
162.2
163.5
0.8%
4.1%
Vancouver
13.4
134.2
138.6
139.5
0.6%
3.9%
2. Non – Residential Building Construction - Investment Index
Statistics Canada released its reports on Investment in Non-residential Building Construction, 2, 3 on April
18th, 2012. These indexes identify reported values of non-residential investment being constructed in the
provinces and census metro areas. Edmonton experienced a decrease in reported non-residential expenditure
of 8.8% from the 1st Quarter 2011 to 1st Quarter 2012. Overall there is a reported 53.8% decrease in
institutional spending in Alberta.
Office of Resource Planning, University of Alberta
2/8/2016
ALBERTA: INVESTMENT IN NON-RESIDENTIAL BUILDING
CONSTRUCTION PROVINCE
Q1
2011
Alberta (total non-res.)
Industrial
Institutional
Commercial
$2,215
$280
$636
$1,299
Q4 2011
Q1 2011
to
to
Q1 2012
Q1 2012
Seasonally adjusted
$ millions
% change
$2,180 $2,197
0.8%
-0.8%
$285
$305
7.2%
8.9%
$329
$294
-10.6%
-53.8%
$1,567 41,598
2.0%
23.1%
Q4
2011
Q1
2012
ALBERTA: INVESTMENT IN NON-RESIDENTIAL BUILDING
CONSTRUCTION METRO REGIONS
Q1
2011
Edmonton
Calgary
Q4
2011
Q1
2012
Seasonally adjusted
$ millions
$704
$630
$642
$819
$833
$835
Q4 2011
to
Q1 2012
Q1 2011
to
Q1 2012
% change
1.8%
-8.8%
0.2%
1.9%
Medical, Lab And Research Equipment, Supplies And Chemicals
1. Industry Trends and Costs
The University has established a Preferred Supplier Agreement for the supply of medical, lab and research
equipment as well as supplies and chemicals. The Supplier has informed that global costs have increased
3.5% this last year which is being passed on to customers. These increases are attributed to the rise in the price
of oil which is used to manufacture many laboratory products and is a key cost component in transportation
and utilities. Raw material prices on base metals declined significantly in 2011 and have remained flat.1
2. Research and Development / Market Trends
Typical Research and Development investment ranges from 7% to 10% of sales. Top line growth for 2012
2013 is estimated to be 5-7% in research and industrial products and 1% in clinical. The trend to
consolidate purchases from fewer suppliers continues.
1
The commentary on Industry Trends and Costs is based on SMS review of the following publications:
www.indexmundi.com/commodities
www.moneycontrol.com
www.commodityblog.com
Office of Resource Planning, University of Alberta
2/8/2016
SECTION B: TRENDS WITHIN THE UNIVERSITY OF ALBERTA
1. Construction


The University constructs its major capital projects using a variety of methods including Construction
Management, Lump Sum Price, Design-Build and variations thereof. Construction of the Edmonton
Radiopharmaceutical Clinic is being completed using a Design-Build construction delivery model.
Construction of the Physical Activity and Wellness begins in May 2012 and will be delivered using a
Construction Management delivery model. The Innovation Centre Engineering is currently under
construction using a Stipulated Lump Sum Price model.
For Alberta Non-Residential Construction, the Construction Sector Council is forecasting a 0.8%
increase in 2012/2013 and a decrease of 1.0% in 2013/14 and an increase of 4.9% in 2014/15. The
percentages in this report are the projections as of the beginning of May 2012.4
2. Medical, Lab And Research Equipment, Supplies And Chemicals


Approved equipment and fit out expenditures are either complete or near completion for the Edmonton
Clinic Health Academy (North and South), Katz Rexall Centre for Pharmacy and Health Research and
the Li Ka Shing Institute of Virology.
CFI and AET grant funding for the next two years total $33,104,958. There may be a variance in this
number as the final reporting will not be available until July. This figure represents active projects and
does not include new funding applications or any anticipated new awards. This figure is higher than
previous forecast of $13M in 12/13, and $10M in 13/14.
SECTION C:
KEY BUDGET DRIVER FORECASTS
INDICATOR: TOP 5 AND ANNUAL % CHANGE
11/12
Actuals
12/13
Forecast
13/14
Forecast
14/15
Forecast
15/16
Forecast
16/17
Forecast
1. Alberta Non-Residential
Construction4
3.8%
0.8%
-1.0%
4.9%
5.3%
7.3%
2. Medical, Lab and Research
Equipment, Supplies and Chemicals
3.5%
4.0%
5.0%
5.0%
5.0%
5.0%
Indicator
1. Construction
Source: Statistics Canada 1, 2, 3
1
Statistics Canada Non-residential Building Construction Price Index (http://www.statcan.gc.ca/dailyquotidien/120214/t120214b1-eng.htm). Base Year Composite Index is 2002 = 100.
2
Statistics Canada Investment in Non-residential Building Construction – Provinces
(http://www.statcan.gc.ca/daily-quotidien/120418/t120418a001-eng.htm)
3
Statistics Canada Investment in Non-residential Building Construction – Metro Areas
(http://www.statcan.gc.ca/daily-quotidien/120418/t120418a002-eng.htm)
4
Construction Sector Council (2011 - 2020): http://www.constructionforecasts.ca/forecast/browse
source data from Statistics Canada, Bank of Canada, CMHC, HRSDC.
2. Medical, Lab and Research Equipment, Supplies and Data
Data compiled from Suppliers, the Canadian Laboratory Suppliers Association, the Montreal Gazette (Div. of
Canwest Publishing), Statistics Canada (Health), Canada Foundation for Innovation.
Office of Resource Planning, University of Alberta
2/8/2016
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KEY BUDGET DRIVER FORECASTS 2013-14 to 2006-17