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| Building permits
April 2005 Analysis – April 2005 The rebound in the value of residential permits in April was more than offset by the first decline in three months in the non-residential sector. As a result, the overall value of building permits issued by municipalities fell 2.6% to $5.0 billion. Even so, construction intentions remain strong. Municipalities issued an exceptional $5.2 billion in March and the value of permits surpassed the $5-billion mark in five of the previous six months. Construction intentions in April were 8.9% higher than the average monthly level in 2004, a record year. In the housing sector, builders took out $3.2 billion in permits, up 7.8% from March, fuelled by advances for both single- and multi-family dwellings. This followed a 12.0% decline in March. In the non-residential sector, the value of permits tumbled 16.0% to $1.9 billion. This drop, which followed the record high $2.2 billion posted in March, was due to declines in the commercial and institutional components. April's total was still 20.8% higher than the average monthly level in 2004. Municipalities issued $19.7 billion in permits between January and April, up 13.7% from the same period last year. The largest contributor to this advance was the non-residential sector with an impressive 29.7% gain to $7.3 billion. From January to April, residential permits have increased 6.1% to $12.4 billion.
The metropolitan areas of Calgary and Edmonton have been the hottest markets in terms of planned construction since the beginning of 2005, with strong results in both residential and non-residential sectors. Vancouver and Toronto have also shown large gains in the cumulative value, but solely on the strength of the non-residential sector. Housing: Growth in both single- and multi-family areas The value of multi-family permits surged 18.6% in April to $1.1 billion, while single-family permits increased 3.0% to $2.1 billion. Overall, municipal authorities approved 19,205 new dwelling units in April, 1,500 more than in March. Low mortgage rates, good employment, rising disposable income as well as strong consumer confidence continued to stimulate the demand for new housing. Furthermore, strong demand for new housing since the beginning of the year had spill-over effects on other sectors of the economy. Retail sales in the furniture sector in the first quarter of 2005 were 3.4% above those in the last quarter of 2004. Sales in building and outdoor home supplies stores in the first quarter of 2005 stood 9.3% above those in the same quarter of 2004, and there has been robust employment growth in the construction sector. Provincially, gains were recorded in April for every province and territory. In terms of dollars, the largest increases occurred in Quebec and British Columbia. In Alberta, the value of housing permits hit a record $524 million, surpassing the previous high of $497 million set in November 2004. Between January and April, the value of single-family dwellings totalled $8.2 billion, up 4.0% from the same period last year. The value of multi-family dwellings increased 10.4% to $4.2 billion. The strong showing in the cumulative value of residential permits can be explained by a strong demand for new housing in the two westernmost provinces. From January to April, the value of permits increased by 24.4% in Alberta and 14.9% in British Columbia. Gains were far less spectacular elsewhere in the country. Commercial, institutional permits decline Builders took out fewer commercial and institutional permits in April, while the value of industrial permits increased for the third month in a row. After an impressive 81.0% jump in March, intentions in the institutional sector incurred the largest decline, tumbling 34.0% to $480 million. Despite this decline the value of institutional permits was still strong. Gains in the educational building category failed to offset declines in hospital and government administrative permits. Alberta took the brunt of the decline, as a permit for a large government administrative building project had been issued in March. The value of permits in the commercial sector fell 11.3% to $1.0 billion. Lower demand for permits associated with warehouse buildings in Ontario precipitated this decline. Even so, the value of commercial building permits was 22.4% higher than last year's monthly average. Permits for the industrial sector showed continuing strength, increasing 5.1% to $372 million. Demand for industrial permits in Alberta was a particularly strong 86.1% to $141 million, as construction intentions for utility buildings increased. The non-residential sector continues to be hit by mixed economic indicators, though positive undertones have dominated lately. Canadian corporations continued to report record earnings in the first quarter of 2005. These profits rose in 11 of the previous 13 quarters following a downturn in 2001. On the commercial side, retailers experienced their strongest quarterly sales increase in the first quarter in just over three years, thanks to robust spending by shoppers in January and February. On the industrial side, there have been concerns about rising finished product inventories and lower order levels. But manufacturers anticipated maintaining their same level of production this summer, according to the Business Conditions Survey. Regionally, 13 out of the 28 metropolitan areas recorded monthly declines in the value of non-residential permits in April, the two largest occurring in Toronto and Calgary. Provincially, Alberta, British Columbia and Ontario recorded the strongest declines. All three components recorded decreases in those provinces, except for Alberta's industrial construction intentions. In contrast, Quebec recorded the largest advance in the non-residential sector, the result of increases in all three components. Municipalities issued just over $7.3 billion worth of non-residential permits between January and April, up 29.7% from the same period in 2004 as all three components increased. The strongest gains occurred in the commercial sector, as the year-to-date level was up 37.7% to $4.2 billion, and in the institutional sector, where intentions increased 19.9% to $1.9 billion. In the industrial sector, the value of permits rose 19.8% to $1.1 billion. Non-residential permits have increased in seven provinces so far this year. The largest growth was in Alberta, where the value of permits nearly doubled. Chart 1
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