The 2020 Mid-Year Economic Update_long

Canadian Building Permits Down 23.7% in August

Decline due to soft nonresidential market in Quebec, residential market in Ontario.

Canadian municipalities issued building permits worth C$6.7 billion (US$6 billion) in August, a 23.7 percent decline, according to Statistics Canada. The drop-off, which followed three months of double-digit increases, was mainly the result of lower construction intentions for nonresidential buildings in Quebec and residential buildings in Ontario.

After five consecutive monthly advances, the total value of permits in the residential sector declined 15.9 percent in August to C$4.2 billion (US$3.8 billion). The largest decreases were registered in Ontario, followed by British Columbia and the Atlantic provinces. Gains were recorded in four provinces, led by Alberta.

In the nonresidential sector, the total value of building permits decreased 40.6 percent to C$2.5 billion (US$2.2 billion) in August, following four consecutive monthly gains. Lower construction intentions were posted in seven provinces, with Quebec contributing most to the national decline.

Residential
Building permits for multi-family dwellings decreased 28.6 percent in August to C$1.8 billion (US$1.6 billion), following a 42.8 percent increase in July. Decreases were reported in six provinces, led by Ontario, with British Columbia a distant second. Alberta and Saskatchewan registered the largest increases.

Construction intentions for single-family dwellings declined 2.4 percent to C$2.3 billion (US$2.1 billion) in August, a second consecutive monthly decrease. Lower construction intentions were posted in seven provinces, with Ontario and Alberta accounting for much of the decline. In contrast, the largest gains occurred in Quebec, followed by British Columbia.

Nationally, municipalities approved the construction of 16,520 new dwellings in August, down 18.9 percent from July. The decline was mostly attributable to lower construction intentions for multi-family dwellings, which fell 26.3 percent to 10,320 dwellings. The number of single-family dwellings was also down, falling 2.7 percent to 6,200 units.

Nonresidential
Institutional building construction intentions fell 76 percent to C$446 million (US$398.8 million) in August, after increasing 29.6 percent in July and 149.3 percent in June. The value of institutional building permits was down in every province except Prince Edward Island. Quebec accounted for much of the national decline, the result of lower construction intentions for medical facilities. Manitoba's decrease was also a result of lower construction intentions for medical facilities. In Ontario, the decline was mostly attributable to a drop in intentions for educational institutions.

In the commercial component, the value of permits fell 12.1 percent to C$1.6 billion (US$1.4 billion) in August, following a 1.2 percent increase the previous month. The decline originated from lower construction intentions in warehouses and office buildings at the national level. Decreases were posted in five provinces, with Ontario and British Columbia registering the largest declines. Newfoundland and Labrador posted the biggest gain.

In the industrial component, the value of permits declined 15.2 percent to C$454 million (US$405.9 million) in August, marking the second consecutive monthly decline. Decreases were posted in five provinces, with Quebec and Alberta recording the largest declines. Lower construction intentions for manufacturing plants and utility buildings were mainly responsible for the decline in Quebec, while in Alberta, the decrease came primarily from utility buildings.

By Geography
The total value of permits was down in six provinces in August, with the largest declines registered in Ontario and Quebec and, to a lesser extent, British Columbia.

Ontario's decrease was mainly the result of lower construction intentions for multi-family dwellings as well as institutional buildings. In Quebec, the decline was attributable to institutional buildings, while the decline in British Columbia came mainly from multi-family dwellings as well as commercial and institutional buildings.

The largest increase occurred in Alberta, where a rise in the value of multi-family dwellings more than offset decreases in single-family dwellings and nonresidential buildings. In Newfoundland and Labrador, higher construction intentions for commercial buildings accounted for the advance.

In August, the total value of permits was down in 22 of the 34 census metropolitan areas.

The largest decreases were in Montréal and Toronto, followed by Vancouver. In Montréal, the decrease was attributable to institutional buildings, whereas lower intentions for multi-family dwellings drove the decline in Toronto. The drop in Vancouver originated from lower construction intentions for multi-family dwellings and nonresidential buildings.

Calgary saw the largest increase in August, followed by Oshawa and St. John's. In Calgary, multi-family dwellings were behind the advance. Higher construction intentions for residential and commercial buildings were responsible for the advance in Oshawa, while commercial buildings explained the gain in St. John’s.

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