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64-001-XIE
Building Permits
January 2001

Highlights


January 2001

Municipalities issued $3.8 billion in building permits in January, the highest monthly figure on record and an increase of 21.5% from December. Vigorous construction intentions in both the residential and non-residential sectors fuelled the gain.

Powered by strong demand for both single- and multi-family dwellings, builders took out $2.0 billion worth of housing permits, up a substantial 22.0% from December. This was the best monthly performance since February 1990.

Intentions in the non-residential sector followed a similar path, rising 20.9% from December to $1.8 billion, the highest level in 11 years. This was almost exclusively the result of a substantial increase in permits for commercial projects.

January 2001 saw a stronger start than did January 2000. The value of building permits was 17.9% higher than the construction intentions for the same month a year ago.

At the regional level, the metropolitan areas of Montréal and Toronto pulled far ahead of other regions. In both areas, every component in the residential and non-residential sectors recorded gains from January 2000.

Increases in both single- and multi- family components

Building permits for single-family dwellings rose 16.2% to $1.4 billion in January, following a 6.4% decline in December. Construction intentions for multi-family dwellings jumped 37.5% to $608 million.

These results are consistent with key indicators showing a strong housing market. In January, housing starts were up 20.1%, sales of existing homes surged and prices for new housing increased at a strong rate. As well, employment levels remained high.

The outlook for the housing sector is positive for 2001. The latest release of Statistics Canada's Survey on Public and Private Investment showed investment in housing is expected to increase for a sixth straight year in 2001.

At the provincial level, by far the largest January increase (in dollar terms) in the housing sector occurred in Ontario (+30.0% to $988 million). The strong construction intentions for multi-family dwellings in the Toronto area drove this increase. Quebec also posted a notable gain (+32.2% to $379 million). In both provinces, these levels were the highest in nine years.

Nova Scotia was the only province to post a decline in residential building permits (-1.9% to $34 million), the province's third monthly decrease in a row for housing intentions.

The total value of residential permits was up 13.2% from January 2000, mainly because of intentions for multi-family dwellings. The provinces that posted the best start to the new year (in dollar terms) were Ontario (+15.0%) and Quebec (+37.6%).

Best start ever for non-residential sector

In January, $1.8 billion in non-residential permits were issued, 23.5% more than in January 2000, and the best January results on record. All three components showed year-over-year increases, but the largest was posted by the industrial component (+76.1%). Among the provinces, Ontario (+65.4%) and Quebec (+112.9%) showed the best start.

Despite a fourth consecutive quarterly decline in the Conference Board of Canada's Index of Business Confidence, the outlook for the non-residential sector remains positive. Corporate operating profits reached a record high in 2000, vacancy rates for office and commercial buildings shrank in many centres and high industrial capacity utilization rates led the non-residential sector to a strong start in 2001.

Non-residential construction activity (excluding engineering) is also expected to grow in 2001, according to the Survey on Private and Public Investment.

On a monthly basis, increases in commercial construction intentions fuelled January's gain in non-residential permits. The value of commercial permits climbed 46.7% from December to $1.0 billion; most of the gain was for offices and hotels. The largest increases in commercial permits were in Quebec (+154.0% to $262 million) and Ontario (+48.9% to $463 million).

The industrial component increased 2.4% to $416 million, largely the result of projects related to utilities. Quebec posted the most significant increase in this component; industrial projects there almost quintupled (+392.9% to $161 million) from December.

However, intentions in the institutional component declined 6.4% to $362 million; education showed the greatest loss. Ontario had the largest decrease in the institutional component (-17.1% to $209 million).

Among the provinces, the outstanding results in the Montréal area led Quebec to the largest increase in the non-residential sector (+148.9% to $486 million). Following a strong month in December, Ontario recorded the most significant decrease (-1.7% to $854 million).


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