Two reports from Statistics Canada Thursday, on housing and capacity utilization, show the economy is still growing.

The agency said housing prices continued to climb in most areas of Canada during April, reaching its highest level since 1990 on a 12-month basis.

StatsCan’s new-housing price index advanced 0.7% in April, up from March’s increase of 0.3%. “On a 12-month basis, the index of contractors’ selling prices rose 5.6%, the highest annual increase since March 1990 when the index rose 5.7%,” StatsCan said.

But Derek Holt, assistant chief economist with Royal Bank Financial Group, noted that the index is up “a cumulative and paltry” 9.3% since 1990 until now.

“New home prices demonstrated next to no appreciation throughout the 1990s and the present pace of increase is relatively modest,” Holt said in a report. “By comparison to the 1987-89 period, new home prices were rising at 10-15% per year. Furthermore, new home prices today are rising at a considerably slower pace than resale prices, which is another distinction from the late 1980s when both new and resale prices were climbing rapidly.”

Statistics Canada said 14 of the 21 metropolitan areas surveyed registered monthly increases in housing prices, thanks to increases in prices for building materials and labour.

Kitchener, Ont., led the way with a monthly increase of 1.5%, followed by Ottawa-Gatineau at 1.3%, St. Catharines-Niagara up 1.2%, Toronto and Oshawa, Ont., ahead 1.1% and Victoria up 1.1 %. Six metropolitan areas registered no change and the only monthly decrease occurred in the greater Sudbury and Thunder Bay region, which declined 0.5% as a result of what Statistics Canada called “competitive factors.”

The largest 12-month increase for new homes was in Victoria, with prices surging 10.4%; it was followed by Regina (7.2%) and Montréal (6.9%).

In another report, StatsCan said industries increased their capacity use for the second consecutive quarter between January and March, fuelled by strong business investment and growth in domestic and international demand.

Industries operated at 83.5% of capacity, up from 82.9% in the fourth quarter of 2003. This gain brought the rate closer to the most recent high of 85.4% in the fourth quarter of 1999.

“The growth in utilization, combined with the reduction in the gap with the 1999 peak, suggests that some industries are approaching their production limits,” the agency said. “However, the Survey of Capital and Repair Expenditures forecasts spending in all sectors that comprise the industrial group (except for the oil and gas extraction sector) will be up this year. This should add to production capacity and moderate the pressure on production facilities.”

StatsCan said in general, capacity utilization went up in all sectors other than mining. In manufacturing, the upward trend to increased capacity use was widespread, with five industries posting levels higher than 90%.

Holt said the fatct the rate remains well below the 87.2% high of the late 1980s might raise concerns about the industrial segments of the economy reaching their production limits in a manner that ignites inflationary pressures. “But, with expectations that a recovery in business investment will continue throughout 2004-05, production limits will themselves be a moving target.