Building permits: Highlights

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64-001-XIE
Building permits
July 2004

Highlights

The value of building permits issued in July drew back 11.4% to $4.8 billion from the record $5.4 billion set in June as both the residential and non-residential sectors staged retreats. Despite the decline, July still came in as the second highest month on record.

A drop of nearly one-third in the value of multi-family permits issued compared to the previous month drove the residential sector down 10.3% to $3.1 billion – a level that still stakes the third best month on record.

The growth in the institutional sector in July has been more than offset by the flagging demand for commercial permits leading non-residential projects to report a monthly fall of 13.3% to $1.7 billion. This level holds as the second highest level for non-residential permits over the last 12 months.

On a year-to-date basis, the residential sector’s strength drove the overall value of building permits for the first seven months of 2004 up 8.6% to $31.9 billion. Between January and July builders took out $21.2 billion worth of residential permits, up 18.3% from the same period in 2003. In contrast, non-residential permits fell 6.7% to $10.7 billion.

Regionally, the census metropolitan areas of Vancouver and Montreal led the gains from 2003, thanks to the demand for new dwellings in both areas. Declines in industrial and institutional building permits lead Toronto to report the greatest year to date declines compared to 2003.

Record roles swap – singles post new high while multi-family component retreats

Canada’s housing market continues to be exceptionally strong, remaining above the three billion dollar mark in July – the third highest monthly value on record – despite a 10.3% decline from June.

The steady upward march in the value of permits for single family dwellings continued in July. The value of homes approved edged up 2.0% from the previous month to top $2.1 billion – a new monthly record. Nearly 11,250 new single family units were approved in the sole month of July.

Multi-family permits – after an extraordinary and record showing last month – declined 29.0% to a robust $975 million dollars. Municipalities approved 9,200 multi-family units during the month.

The continued feverish demand for new dwellings continued to be affected by the very advantageous mortgage rates, by the positive employment situation as well as the increase in the disposable income.

Alberta posted the greatest monthly gain in dollar terms, expanding 11.2% to $408 million on the strength of both single and multi-family permit issues. British Columbia, where permits for multi-family dwellings had lofted residential sector to a record last month experienced the greatest retreat, sliding 41.5% to a healthy $474 million.

On a year-to-date basis, the value of single family permits has totalled $14.1 billion dollars, a 13.1% increase over the same period last year. The multi-family segment has staged even more robust growth, gaining 30.3% to $7.1 billion.

Overall, municipalities have authorized a total of 141,628 single and multi-family units over the first seven months of 2004, 11.6% more than for the same period in 2003.

In every province and territory, the cumulative value of housing permits issued thus far in 2004 surpasses last year. British Columbia and Quebec have posted the most striking growth in dollar terms with both jurisdictions adding over a billion dollars to last year’s cumulative total for the period.

Large decline in the commercial construction intention pull down non residential sector

Builders took out fewer commercial and industrial permits in July, while the value of institutional permits climbed.

Commercial permits fell 29.0% to $764 million after June tremendous increase. This was largely the result of a decline in demand for recreational project and trade and services buildings. Commercial permits in Ontario plunged 26.6% to $329 million, the largest drop among the provinces.

The industrial component fell 1.6% to $301 million after two monthly gains. However, this level remains higher then the monthly average this year. Lower demand in the mining and agricultural building category in British Colombia is responsible for this slide.

Permits for the institutional sector recorded an 11.6% increase to $592 million. This was the highest level since July 2003. Demand for institutional permits in Ontario was particularly strong, increasing 21.1% to $307 million, as construction intentions for educational buildings in the Toronto region increased.

Despite the decline in the value of non-residential permits, good news emerged for the non-residential sector recently. Retailers have enjoyed five monthly sales gains since the beginning of 2004. Cumulative sales in the first six months of the year were 4.0% higher than in the same period of 2003. Canadian corporations earned record high profits of $50.7 billion in the second quarter of 2004, up 4.1% from the first quarter. Operating profits have now risen for four consecutive quarters. In addition, manufacturers posted record-high shipments in June.

On a provincial basis, the largest decrease (in dollars) among the provinces occurred in Quebec (-27.9% to $303 million). In this province, a gain in the institutional component was more than offset by declines in the industrial and commercial sectors. In contrast, gains in the three components led Alberta to July’s strongest increase.

On a year-to-date basis, about $10.7 billion worth of non-residential permits were issued in the first seven months of 2004, down 6.7% from the same period of 2003. This drop was related to decreases in the institutional (-15.5%) and industrial (-19.1%) components. The commercial component recorded a 4.7% increase.

Among the provinces, the largest decline in the non-residential sector was in Ontario (-11.2% to $4.8 billion), mainly the result of decreases in the institutional and industrial components in Toronto and the institutional component in Hamilton.

In contrast, the strongest gain occurred in British Columbia (+10.0% to $1.2 billion).

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Date Modified: 2004-09-09	Important Notices