The 2020 Mid-Year Economic Update_long

Canadian Building Permits Down 14.5% in May

Month-to-month decrease due to declines in five provinces.

Canadian municipalities issued building permits worth C$6.7 billion (US$5.3 billion) in May, down 14.5 percent from April, following two months of double-digit gains. Declines were recorded in five provinces, led by Ontario, which had posted a notable increase the previous month.

Construction intentions for non-residential buildings decreased 16 percent to C$2.8 billion (US$2.2 billion), following a 24.8 percent gain in March and 31.7 percent in April.  Increases in seven provinces and one territory were not sufficiently large to offset decreases in the other provinces and territories. Ontario led the decline, followed by British Columbia and Newfoundland and Labrador.

In the residential sector, the value of permits declined 13.5 percent to C$3.9 billion (US$3.1 billion) in May, ending a string of three consecutive monthly increases. Declines were registered in seven provinces, with Ontario and Alberta responsible for much of the decrease. British Columbia, in turn, reported the largest gain.

Nonresidential sector

In May, the value of permits issued for commercial buildings decreased 0.4 percent to C$1.5 billion (US$1.2 billion). Lower intentions for retail complexes, hotels and restaurants, warehouses as well as other minor commercial projects more than offset increased intentions for recreational buildings, office buildings and laboratories. British Columbia registered the biggest decline, while Quebec recorded the largest increase.

In the industrial component, construction intentions fell 15.6 percent to C$408 million (US$320.7 million) in May, following three straight monthly advances. The decline originated from lower construction intentions for utilities buildings and transportation-related buildings. Declines were reported in six provinces, led by Ontario and Newfoundland and Labrador. Alberta and Quebec posted the largest gains.

The value of building permits in the institutional component fell 34 percent to C$867 million (US$681.4 million) in May, after posting gains of 83.7 percent in March and 88.1 percent in April. The decrease at the national level resulted from lower construction intentions for medical facilities, which recorded a large increase in April. Declines were registered in four provinces, with Ontario accounting for most of the drop, followed by British Columbia. Gains were posted in the six remaining provinces, led by Alberta, and were mainly the result of higher construction intentions for educational facilities.

Residential sector

In May, Canadian municipalities issued building permits for single-family dwellings worth C$2.3 billion (US$1.8 billion), down 5.5 percent from April, the third decline in four months. Decreases were posted in five provinces, with Ontario recording the largest decline, followed by Alberta, a distant second. Quebec registered the largest gain.

Construction intentions for multi-family dwellings fell 22.9 percent to C$1.6 billion (US$1.3 billion) in May. The decrease stemmed from lower construction intentions in every province and territory, except British Columbia, New Brunswick and Nunavut.

At the national level, municipalities approved the construction of 15,381 new dwellings in May, down 14.8 percent from April. The decrease came mainly from multi-family dwellings, down 20.6 percent to 9,719 units. The number of single-family dwellings declined 2.8 percent to 5,662 units.

By geography

The total value of building permits declined in five provinces in May, with Ontario posting the largest decrease, followed by British Columbia, Alberta, Newfoundland and Labrador and Nova Scotia.

After reporting the largest increase the previous month, Ontario posted a decline, mostly as a result of lower construction intentions for institutional buildings, multi-family dwellings and single-family houses. In British Columbia, the decrease originated from commercial structures, institutional buildings and single-family dwellings.

In Alberta, the decline was mostly attributable to multi-family dwellings, single-family houses and commercial buildings. In Newfoundland and Labrador, lower construction intentions for industrial buildings explained much of the decline, while in Nova Scotia, lower intentions for multi-family dwellings were responsible for the decline.

In contrast, Quebec and New Brunswick registered the largest increases. In Quebec, the increase came from higher construction intentions for non-residential buildings and single-family dwellings. In New Brunswick, the gain was attributable to every component, except industrial buildings.

The total value of permits fell in 16 of the 34 census metropolitan areas, with Toronto posting the largest decline, followed by Calgary and Vancouver.

In Toronto, the decline originated from institutional buildings and multi-family dwellings. Both components were up notably the previous month. In Calgary, lower construction intentions for multi-family dwellings and, to a lesser extent, industrial buildings and institutional buildings were responsible for the decline. In Vancouver, commercial and institutional buildings accounted for much of the decrease.

In contrast, Hamilton and Edmonton posted the largest gains. In Hamilton, the advance was attributable to higher intentions for institutional buildings, while in Edmonton, increased construction intentions for multi-family dwellings, institutional structures and industrial buildings more than offset lower intentions for single-family dwellings and commercial buildings.

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