September 17, 2012

Canadian building permit decline

OTTAWA

Lower construction intentions for residential and non-residential buildings, particularly in Ontario, were the main factor in the 2.3 per cent decline of building permits between June and July of this year.

In July, Canadian municipalities issued building permits worth just over $6.8 billion. This follows a month of relative stability between May and June.

In the non-residential sector, the value of permits fell 2.1 per cent to $2.5 billion after a 9 per cent decrease in June. Non-residential permits declined in six provinces with Ontario and Saskatchewan accounting for most of the drop.

In the residential sector, the value of permits decreased 2.4 per cent to $4.3 billion, following two consecutive monthly advances. The decline was attributable mainly to lower construction intentions in four provinces, led by Ontario, with Saskatchewan a distant second.

July marked the second consecutive month of decline for the value of permits for non-residential construction. Declines in the institutional and industrial components more than offset gains in the commercial component.

In the institutional component, the value of permits fell 25.2 per cent to $404 million, the second consecutive monthly decline and the lowest level since February 2012. The decrease was mainly the result of lower construction intentions for educational institutions in Ontario and British Columbia and government buildings in Saskatchewan and Alberta.

The value of permits for industrial buildings decreased 3.7 per cent to $462 million, following a 0.5 per cent advance in June. The decline was mostly the result of lower construction intentions for manufacturing plants in Ontario, the value of which had increased the previous month.

In contrast, Alberta and Quebec recorded the largest increases. Alberta’s gain came from manufacturing plants, utilities and transportation-related buildings. Quebec’s advance was attributable to utilities and transportation-related buildings.

In the commercial component, the value of permits rose 6.4 per cent to $1.7 billion, the fifth monthly increase since the beginning of the year. The advance was largely a result of higher construction intentions for a variety of commercial buildings.

These included retail outlets and theatre and performing art centres in British Columbia, and recreational facilities in Newfoundland and Labrador, Saskatchewan and New Brunswick.

The total value of permits fell in 24 of the 34 census metropolitan areas.

Toronto and Regina registered the largest decreases. In Toronto, the decline was primarily attributable to lower construction intentions for residential and institutional buildings. Regina’s decrease originated from multi-family dwellings and institutional buildings.

The largest advance occurred in Vancouver and Montréal. In Vancouver, the gain was the result of growth in the value of permits for commercial buildings and multi-family dwellings.

In Montréal, the advance was attributable to a large extent to multi-family dwellings and industrial buildings.

DCN NEWS SERVICES

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