April 10, 2019
By Jason Cramp
Editor’s note: This is our 41st annual report on the state of the Canadian pool industry, including statistical information and market analysis. Information is based on Statistics Canada’s building permit records for swimming pools with an overview of new pool permits for census metropolitan areas (CMAs). The figures are conservative and do not reflect many of the rural areas that do not require building permits for pool construction.
The Canadian swimming pool market, based on the number of pool permits issued, showed slight growth in 2018. In fact, the total number of permits recorded last year was the third highest in the last 14 years, ranking only behind 2016 (13,054) and 2012 (12,517).
Speaking of the last 14 years, the longest streak the Canadian pool industry has strung together in regards to a year-over-year increase in building permits has been three (2010-2012). During this period, the third year was the most successful by far. This could be a good sign for the industry during the 2019 season!
That said, despite global economic uncertainty, trade conflicts, a decline in consumer confidence, and extremely unfavourable weather (more on this later), 2018 pool permits increased year-over-year by 1.3 per cent.
At the same time, after rising steadily in 2017, consumer confidence took a full 180 to start last year on a decline. According to The Conference Board of Canada, although finances improved, Canadians became pessimistic about the outlook of the labour market and, at the start of 2018, questioned whether it was a good time to make a major purchase.
As per the findings of Pool & Spa Marketing’s recent salary survey, it goes without saying that poor weather and an unstable economy can be a recipe for trouble for this seasonal industry.
According to Environment and Natural Resources Canada, the duration of winter 2017-2018 was one for the record books. Nationally, the season started in November (2017), became even colder in December, and continued into April (2018)—six months of winter in which a number of extreme cold records were broken.
Not only did spring start late, but the transition from winter to spring never really occurred as summer-like weather arrived in May and only got warmer through to August. How did this factor on the trends for the number of pool installations in 2018? Well, thanks to a small increase in permit registrations in December 2017, it interrupted what would have been 13 consecutive months—between June 2017 and June 2018—in which pool permits decreased year-over-year.
Needless to say, the ebbs and flows of pool permit registrations in 2018 essentially mimicked the warm-to-hot weather patterns experienced across the country. This is despite the fact consumer confidence had a minor recovery in March, then rose again in April and May before it started to decline again in June.
Unlike the start of the 2017 season, which benefited from the strength of the record-breaking summer the year prior, the same cannot be said for last year. As mentioned earlier, the end of the 2017 season was weak and this trend continued into the first and second quarters of 2018, which were down 23.5 per cent and six per cent, respectively. However, once summer—and the extreme heat—finally arrived, pool permits increased in the third and fourth quarters, which had gains of 20.5 per cent and seven per cent.
When breaking up last season into three categories: start of year/early spring (January to April); mid-spring/late summer (May to August); and fall/winter (September to December), pool permit registrations were only down in the first category. They increased by six per cent in the second category and 13 per cent in the third.
This is evidence the trend of winter arriving later, and lasting longer, still continues. As a result, more than 80 per cent of all pool permit registrations occurred during the last eight months of the year. Overall, Statistics Canada reported 12,224 permits were issued in 2018, representing 157 more than the year prior. Permit registrations in census metropolitan areas (CMAs), on the other hand, decreased by 0.5 per cent, representing 54 fewer permits than in 2017.
Top five major urban centres with increased building permit registration in 2018
Top five major urban centres with decreased building permit registration in 2018
|St. Catharines (Niagara)||268||221||47|
As pool permits were up slightly in 2018, the industry’s ebbs and flows were apparent from coast-to-coast. Population alone makes Ontario and Quebec the country’s largest regions for pool installations; however, this also makes each province more susceptible to either large decreases or increases in pool building permit registrations. Fortunately, the latter occurred in each province. Together they make up 90.9 per cent of the 2018 Canadian pool market, representing a 25.9 per cent increase year-over-year. One of the biggest reasons for this upswing is the turnaround year that occurred in Quebec. In 2017, only one of six CMAs reported positive growth whereas in 2018 only one CMA saw fewer permits. In fact, the lone CMA was Sherbrooke, which only had one less permit than in 2017. Ontario had 11 CMAs reporting increases, which was two more than the year prior.
In Atlantic Canada, pool permits were down 43 per cent over 2017, while western Canada saw permits increase by 31 per cent. (See the chart ‘Building Permits Issued for Swimming Pools in Census Metropolitan Areas (CMAs) 2006-2018 for details on specific municipalities).
From spring blizzards, rare June frosts, summer snow in Newfoundland, and wide-spread power outages, it was another rough start to the year as only 10 permits were recorded between January and March. That said, it was still nine more than there were registered during this period in 2016, which was a benchmark year for most of the country.
Over the next four months (April to July), pool permit registrations picked up, but nowhere near the pace of the 2017 season. In fact, permits were down 57 per cent, from 260 in 2017 to 112 last year. This drop was largely in part to an 82 per cent decrease in permit registrations during the month of July in Nova Scotia (Halifax). That said, it was still better than the one permit that was issued in this region in 2015.
Regions such as Newfoundland (up three permits) and Moncton (up six permits) showed year-over-year increases, while registrations in New Brunswick continued trending upwards with a 5.5 per cent increase over 2017. Prince Edward Island and Nova Scotia failed to see a continuation in permit increases in 2018. Unfortunately, St. John’s has been one CMA in this region that has been in a downward spiral for the last three years.
Once again, the number of pool permits registered last year between July and December outpaced the 2017 season by 26 per cent. However, the 66 per cent year-over-year increase experienced in 2017 could not be sustained, resulting in 43 per cent fewer permits in 2018. This region represents 1.1 per cent of the total number of building permits in Canadian CMAs, which is a decrease of 2.4 per cent in comparison to 2017.
Building Permits Issued For Swimming Pools in Census Metropolitan Areas (2014-2018)
|Total Major Urban Area Permits||6994||7545||9439||8824||8776|
|The installation of residential swimming pools does not require a building permit in every municipality. Some areas issue permits for inground pools only. These figures are therefore conservative. Statistics Canada combined the Ottawa/Hull/Gatineau statistic. Source: Statistics Canada|
Similar to winter 2015, the weather was not kind to those living in la belle province. After an abysmal 2017 season, the long, cold winter delayed project starts and likely moved the idea of a pool installation for many homeowners down on their list of priorities. In fact, in early April, much of southern Quebec was felled with freezing rain and snow—cities such as Montreal and Gaspe endured this weather for nearly 20 hours. Another storm surge in Quebec City led to the St. Lawrence River breaching its banks and causing flooding. Needless to say, pool permit registrations between January and March last year were 13.3 per cent lower—leaving many thinking about what the pool season had in store.
As it is always said, no one can predict Mother Nature. After a very short-lived spring, summer roared into the province with a vengeance, and June through July the province faced one of the longest and most intense heat waves on record. In Gatineau, for example, the humidex reached a record high of 48, while in Montreal, Urgences-sante had a 30 per cent increase in heat-related emergency calls.
That said, between April and July the province had a 79.5 per cent spike in year-over-year pool permit registrations, which was followed by another 70.6 per cent increase between August and December. In total, pool permits were up by 48 per cent over the 2017 season.
Further, the number of permits registered last year (8380) was the most in the last 10 years. In fact, every CMA in the province—except for Sherbrooke—had increases between 2017 and 2018. Montreal, the largest city in this region, was up by 0.7 per cent; however, it was Quebec City, the capital, which had the biggest year-over-year increase at 23 per cent. Trois-Rivières (12.5 per cent) and Ottawa-Gatineau (11.5 per cent) were second and third, respectively.
This was a comeback year for much of the province as many CMAs were down between 10 and 16 per cent in 2017. Further, after falling off the list of the country’s top producers of pool permits in 2017, Montreal is back in the number three position. Quebec City now holds the top position after recording its fourth consecutive year of permit increases. Overall, 3355 more pool permits were registered in the province in 2018 compared to the year prior.
Quebec represents 66.8 per cent of the total number of pool building permits issued in the country’s CMAs, which is an increase of 2.8 per cent in comparison to 2017.
Much like Ontario’s neighbour to the East, many sought shelter from the cold due to the record freezing temperatures that kick started the long winter ahead.According to Environment and Climate Change Canada, much of southwestern Ontario, in areas such as London, Kitchener, Windsor, Guelph, Cambridge, Waterloo, Brantford, Sarnia, Stratford, Woodstock, and St. Thomas were hit by half a month’s worth of rainfall over the course of three days in April. Toronto, the province’s capital, did not get off easy either as a mix of ice pellets, freezing rain, and rain hit this region hard over the course of a 54-hour period. The weather was so severe in early April the CN Tower was closed and a Blue Jays game was even cancelled.
Although the summer saw extremely hot temperatures and high humidex levels, many metropolitan areas experienced flooding throughout different periods of the season.
Once again, the weather in this province kept builders on standby as to when the season would start. Optimism is important in this industry, especially when one is not sure if the weather is going to co-operate. That said, it was not too long ago that permit registrations between January and April were on the decline in Ontario (2013-2015), but who would have thought—economy and weather in all—pool permits during this period actually increased for the third consecutive year. In 2018, permit registrations were 4.3 per cent higher than in 2017 and 121.6 per cent higher than in 2016. This upward trend continued throughout the year as 435 more permits were registered between May and August (35 per cent increase) and another 572 between September and December (55 per cent increase).
Of 16 reporting CMAs in the province, pool permits were up in 11 and lower in five in comparison to 2017. Toronto, however, after reporting three consecutive years (2015-2017) with increased pool permit registrations had a 21.3 per cent year-over-year decrease. As a result, the city was also bumped from the top five CMAs with increased building permits (number four in 2017) to the second spot on the list of top five with decreased permits.
Could this have been weather-related? As mentioned earlier, the extreme weather that occurred in southwestern Ontario likely also affected other CMAs such as Kitchener-Cambridge-Waterloo, as this region also experienced a decrease in pool permits. In fact, 20 fewer were registered, representing a decrease of 13.5 per cent. Other CMAs with fewer permit registrations last year included Barrie (down 20.3 per cent) and St. Catharines (down 17.5 per cent).
It was not all doom-and-gloom, however, as Windsor (number three overall in 2017) moved up one spot thanks to a 24.5 per cent increase in pool permits, representing 47 more than the year prior. Brantford was also up by 20.5 per cent as was Peterborough at 14.7 per cent.
Ontario represents 24.1 per cent of the total number of building permits issued in Canadian CMAs, representing an increase of 0.2 per cent.
The weather in the Prairies (Manitoba, Saskatchewan, Alberta) varied greatly from province to province. According to Environment and Climate Change Canada, the frost line in some areas in this region measured 2 m (6.5 ft) deep until mid-May. If this was not enough, drought was another concern between April and August. More specifically, wildfires once again took their toll in Alberta where areas such as Calgary faced almost 500 hours of smoke in August. Further, between September and October, this region also experienced an abrupt change of seasons—from summer to winter. Also noteworthy, was the fact Edmontonians faced a record 384 mm (15 in.) of snowfall in September.
When looking at the region’s pool permit records and taking into account some of the climate conditions described above, it helps one understand how different CMAs are affected. It also puts into perspective how volatile any one region is with respect to weather disruptions and confidence in the economy.
For instance, five CMAs reported a decrease in permits in 2016, while only one of six had fewer permits in 2017. Last year, this region had three CMAs report decreases, as well as one province.
In breaking this down, Alberta was the worst hit with 36 less permits registered (down 23.3 per cent). One of the biggest reasons for this was due to the fact Edmonton was down 65 per cent year-over-year with 50 less permits reported.
Although Regina was down 60 per cent in 2018, Saskatchewan was up by almost 30 per cent. Finally, Manitoba was the most successful as pool permits increased by 58.5 per cent last year. This marks the province’s second consecutive year of growth.
Overall, the Prairies represent three per cent of the total number of building permits issued in Canadian CMAs, which is the same as last year.
Similar to 2017, this province faced a range of calamities—from spring flooding and uncontrollable wildfires which were compounded by a dry, hot summer. In fact, nearly 2000 wildfires were active across the province and by August there were 460 occurring simultaneously—more than any single day in 2017.
Unlike the 2017 season where permits were up in the Prairies but down in British Columbia, the trends last season were the opposite. For instance, 2017 pool permits were down in regions such as Abbotsford-Mission and Victoria, but last year these CMAs showed increases of 100 and 33 per cent, respectively. Permits also increased in Kelowna for a second year (up 5.4 per cent); however, Vancouver reported its second year of decline (down 9.6 per cent).
In a year-over-year comparison, this region, as a whole, was up during the first six months of 2018 by 51 per cent; and again between July and December by 16 per cent. Overall, the province experienced a 26.5 per cent increase in pool installations in 2018, up 23.5 per cent over the year prior.
British Columbia represents five per cent of the total number of building permits issued in the country’s CMAs, which is the same as the 2017 season.
In 2018, the swimming pool industry continued to make gains on the success it had in 2017. Despite the concern of less discretionary spending by homeowners, most builders will agree the weather also plays a significant role in the success of the pool industry. A late start to the season can be one of the biggest enemies of the pool industry as it can lead homeowners to have a mindset of “let’s wait until next year.” Further, for the sales builders do have, construction cannot get started properly until late spring/summer, which makes things difficult when dealing with the backlog.
According to The Conference Board of Canada, the economy is projected to slowdown to 1.9 per cent growth in 2019. One factor in this forecast is the easing of household spending as a result of higher household debt loads, rising interest rates, and soft wage growth. As part of this forecast, it is predicted residential construction will decrease thanks to the lower demand for new homes and a weaker outlook for renovation spending.
That said, those homeowners who have planned properly, or simply have the means to make this type of purchase, will still look to enhance their backyard environment. From the builder’s perspective, it is important to expand one’s service offerings; therefore, should new home residential construction projects slowdown, think of older homes in non-traditional areas as another business opportunity where small pools or spas can be built. In fact, some firms are taking on fewer projects each season as the projects they are completing are becoming increasingly complex.
Further, should the Canadian dollar remain, or drop, from its current value, another saving grace for the industry will be the escalating costs to travel to sun destinations. More people will be inclined to stay home and spend what discretionary income they have on new pools and other renovations rather than travelling. That said, a decent summer is still needed to make 2019 a good year.
2018 Percentage of Inground Swimming Pool Permits Issued (by Census Metropolitan Areas [CMAs])
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