Building permits

Construction intentions rebounded in February as gains in non-residential building permits more than offset a second consecutive monthly decline in Canada's housing sector.

Municipalities issued $5.2 billion in building permits in February, up 3.6% from the previous month. The total value of building permits has now been on an upward trend since the beginning of 2004.

Contractors took out $1.8 billion in permits for non-residential projects, up 14.4% following a 13.4% decline in January. Permits rose in all three components, industrial, commercial and institutional.

However, the value of residential permits fell 1.5% to $3.4 billion, the second retreat in a row since the record high set in December. The value of single-family permits fell for the first time in eight months.

However, housing construction intentions remained strong as February's level was 5.0% higher than the monthly average in 2005, a record year. Furthermore, the value of housing permits has been on an upward trend since the beginning of 2005.

Regionally, 22 out of the 28 census metropolitan areas showed faster starts than in 2005. The other six areas were all in Ontario. Three western areas (Calgary, Edmonton and Vancouver) showed the largest gains, thanks to their dynamic housing sectors.

First decline in eight months for single-family dwellings

The value of single-family permits fell 7.7% in February to $2.3 billion, the first monthly decline since June 2005. Despite the decrease, the demand for single-family dwellings remained strong as February's level was 8.0% higher than the monthly average in 2005.

Furthermore, municipalities approved 10,563 new single-family units, slightly more than 400 above last year's monthly average.

The value of multi-family permits increased 13.9% to $1.1 billion in February. A total of 9,140 new multi-family units were approved, which was 630 below last year's monthly average.

Western Canada's dynamic economy has fuelled a strong demand for new single-family dwellings. The demand for new single-family dwelling has been on an upward trend since the middle of 2005.

Since the beginning of the year, single-family dwellings have accounted for 56.2% of all new dwellings authorized, well above the proportion of 50.9% for 2005 as a whole.

The housing sector continues to benefit from advantageous mortgage rates, strong employment, a strong level of immigration and high levels of consumer confidence.

Provincially, the important decline in the value of housing permits in Ontario in February more than offset strong gains shown in Quebec, as well as in Alberta and British Columbia.

In Ontario, the value of single-family permits hit its lowest level since January 2005. In Quebec, the strong gain followed weak results in January when the value of housing permits hit their lowest level since June 2003.

In Alberta, the value of residential permits again hit a record high. Gains in housing in British Columbia came as a result of on-going strong demand for new single-family dwellings, as well as a rebound in the value of multi-family permits.

Non-residential: Big rebound in all three components

Construction intentions in Canada's non-residential sector rebounded from a decline in January. However, despite the strong increase, the value of non-residential permits has been on a declining trend since intentions peaked in mid-2005.

Several economic factors are consistent with a fertile environment for the non-residential sector: strength in retail and wholesale sectors, growth in consumer spending, declining vacancy rates for office buildings, favorable interest rates and record operating profits posted by Canadian corporations.

In the commercial sector, permits increased 9.2% to $1.1 billion, the result of higher intentions in the recreation, trade and services and warehouse categories. Provincially, Ontario and British Columbia reported the largest increases in dollar terms, whereas the largest decline was in Quebec.

In the industrial sector, the value of permits rebounded 36.3% to $273 million, halting three months of declines. However, this level was 18.0% lower than last year's monthly average.

Every industrial category recorded an increase in February, with the utility category showing the largest gain. The most significant increase among the provinces occurred in Alberta, where industrial permits more than tripled from a 22-month low in January to $58 million.

In the institutional sector, the value of permits rose 16.0% to $496 million, as a result of a strong gain in educational projects. The most significant increase in the institutional component occurred in Quebec, where permits soared 55.6% to $165 million, the highest level since December 2002.

The largest contributions to the monthly gain (in dollars) in the non-residential sector came from Alberta (+35.5% to $339 million), Ontario (+10.5% to $675 million) and British Columbia (+20.3% to $287 million). In contrast, New Brunswick recorded the largest drop, falling 53.6% to $25 million.

Alberta and British Columbia recorded increases in all three components while all three declined in New Brunswick.

Non-residential permits were up in 17 of the 28 census metropolitan areas. The largest increase (in dollars) occurred in Toronto, the result of strong gains in both commercial and institutional intentions. In contrast, Windsor recorded the strongest decrease, mainly the result of a drop in institutional permits.

Available on CANSIM: tables 026-0001 to 026-0008, 026-0010 and 026-0015.

Definitions, data sources and methods: survey number 2802.

The February 2006 issue of Building Permits (64-001-XIE, $15/$156) will be available soon.

The March building permit estimate will be released on May 4.

To order data, contact Brad Sernoskie (613-951-4646 or 1-800-579-8533; bdp_information@statcan.gc.ca). For more information, or to enquire about the concepts, methods or data quality of this release, contact Étienne Saint-Pierre (613-951-2025), Investment and Capital Stock Division.