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Construction Permits in Canada Fall in February
April 7, 2008
Source: Statistics Canada, www.statcan.ca
Construction intentions in Canada cooled for a fourth consecutive month in February, on the heels of a sharp decline in the value of building permits for non-residential construction in Ontario.
Municipalities issued $5.8 billion worth of building permits, down 1.0% from January. Intentions peaked in May and June 2007 at $7.0 billion.
February's decline resulted from much lower non-residential construction intentions in Ontario. If the province were excluded, the total value of building permits nationally would have increased 9.8%, instead of declining 1.0%.
Nationally, a marked increase in residential intentions was not enough to offset a decline in intentions in the non-residential sector.
In the residential sector, the value of building permits increased 18.2% to $3.9 billion. This was fuelled by jumps in values of both multi- and single-family permits.
The value of non-residential permits fell 25.6% to $1.9 billion, the lowest level over the last 12 months. February's loss was due to double-digit decreases in permits for all three components: institutional, commercial and industrial.
These results could have an impact on building sites later in 2008, as building permits are a leading indicator for construction activity. Substantial decline in Ontario Gains in the total value of building permits in seven provinces and in all three territories were totally offset by a substantial decline in Ontario.
Overall construction intentions dropped 16.0% to $2.0 billion in Ontario, the lowest value since April 2007. Falls in all three non-residential components in Ontario led the non-residential sector to a 44.9% decrease in February. However, this decline was partly offset by a strong rebound in the province's residential sector (+21.3%).
New Brunswick and Saskatchewan were the others provinces showing retreats, also the result of lower non-residential construction intentions.
The largest gains in dollar terms occurred in Alberta (+11.8% to $1.3 billion) and British Columbia (+16.1% to $945 million). In both, the demand for new dwellings largely drove the gain. Several large projects for multi-family dwellings were approved in Alberta, sending the value of multi-family permits to its second highest level on record.
All provinces and territories posted gains in the residential sector. Non-residential: Significant decline in every component The value of building permits declined substantially in all three non-residential components in February.
Following a 27.0% gain in January, the institutional component plunged 35.7% to $452 million, the lowest level since April 2007.
The decline was spread across various types of buildings (schools, medical buildings, administrative buildings, nursing homes). Overall, seven provinces posted declines, with the largest in Ontario, Alberta and Quebec.
In the commercial component, the value of permits fell 16.2% to $1.2 billion, largely the result of a significant decline in projects for office buildings and hotels. It was the second lowest level over the last 12 months. Again, Ontario recorded by far the largest share of this decrease, while intentions for retail space surged in Alberta.
On the industrial side, the value of permits plunged 39.4% to $265 million, the lowest level since March 2006. This followed a 32.2% gain in January. Significant declines in projects for manufacturing buildings in Ontario and utility buildings in Alberta were behind these results. In Ontario, the value of industrial permits hit its lowest level since April 2005.