The value of building permits issued in July, $3.4 billion, was unchanged from June. A decline in permits for housing was offset by a rebound in the non-residential sector.

The value of non-residential permits jumped 13.9% to $1.6 billion, owing mainly to a substantial gain in the commercial component. In contrast, after two important monthly increases, the residential sector dropped 10.2% to $1.8 billion as construction intentions for multi-family dwellings plunged.

For the first seven months of the year, the value of building permits totaled $23.5 billion, up 13.0% from the same period last year. Advances in each component of both residential (+9.3% to $12.7 billion) and non-residential (+17.7% to $10.8 billion) sectors contributed to this showing, the strongest since 1989.

Regionally, by far the largest growth (in dollars) came from the Montreal region, largely due to projects in the commercial sector. In Montreal, the value of building permits was 49.5% higher for the first seven months of 2001 than the same period last year. The Toronto region also posted a sizeable advance due to strong housing construction intentions.

Following a peak in June, municipalities issued $438 million in permits for multi-family dwellings in July, down 32.1% from the previous month. Permits for single-family dwellings were up slightly, +0.6% to $1.3 billion.

Despite the decline in July, the outlook for the housing market remains encouraging as housing starts, sales of existing homes and renovation spending are expected to be up in 2001 in comparison with 2000, according to Canada Mortgage and Housing Corporation. Furthermore, mortgage rates are still advantageous, vacancy rates are tight in several centres and prices for new homes have continued to increase. The advance shown in the cumulative housing permits so far this year is consistent with these results.

July’s decline came in large part from Ontario (-17.4% to $819 million), but also from Quebec (-9.1% to $290 million). In both provinces, the multi-family component was behind the decrease. On the other hand, the largest growth was recorded in Alberta (+5.1% to $271 million).

For the January-to-July period, the healthy state of the residential sector has been brought about by gains in both multi-family (+20.3%) and single-family (+5.4%) dwellings. The cumulative value for 2001 was the housing sector’s best result for the first seven months of any recorded year.

Compared with the first seven months of 2000, the largest cumulative gains (in dollars) occurred in Ontario (+8.2% to $6.3 billion) and in British Columbia (+25.4% to $1.6 billion). Both provinces posted gains in single- and multi-family dwellings. Nova Scotia had the largest decline (-16.8%).

July’s 13.9% rebound in non-residential building permits followed two straight monthly declines and was led by commercial and institutional intentions.

The value of commercial permits jumped 23.3% to $850 million due largely to the gains in office buildings, warehouses and buildings for trade and services. Ontario recorded the largest growth (+69.4% to $366 million) due to high construction intentions in the Toronto region.

Institutional intentions increased 8.5% to $510 million, the best showing ever for this component. The medical and hospital category, as well as government buildings and social service projects showed the most significant increases. Provincially, the highest growth for this component occurred in British Colombia.

Only the industrial component showed a decline in July (-1.8% to $242 million), pushed down by the utility and transportation category. Alberta recorded the largest drop in this component.

Among the provinces, Ontario recorded the largest increase in the non-residential sector (+23.2% to $713 million) due to strong results for the commercial component in the Toronto region and to institutional intentions in the Kitchener region. In contrast, following a robust gain in June, Prince Edward Island recorded the most significant decrease.

On a year-to-date basis, municipalities issued $10.8 billion in permits for the non-residential sector from January to July, up 17.7% from the same period of 2000. This was the best result since 1989, and was fuelled mainly by advances in commercial (+15.8% to $5.9 billion) and institutional (+36.3% to $2.7 billion) construction intentions. A rise in the industrial component (+4.6% to $2.2 billion) also contributed to the gain.

Low vacancy rates for office and industrial buildings in several major centres combined with high capacity utilization rates and higher proposed construction spending by municipalities are consistent with the gain in non-residential building intentions in 2001.

Strong increases in non-residential permits issued for the Montreal area led Quebec to the largest gain among the provinces (+47.2% to $2.5 billion), with all three components showed growth. In contrast, Nova Scotia posted the largest decline (-37.9% to $162 million) due to decreases in all three components.