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| Building permits
November 2005 Analysis – November 2005 The value of building permits issued by municipalities in November fell below the $5.0-billion mark for the first time since July as both the housing and non-residential sectors posted declines. Building contractors took out $4.9 billion in permits, down 5.7% from October. Even so, building intentions appear poised to set a second consecutive annual record. On a cumulative basis, construction intentions for the first 11 months of 2005 were just $166 million short of the annual total for 2004, which was an all-time high. In the housing sector, municipalities issued $3.2 billion worth of permits in November, down 5.4% from October, the result of a large decline in the multi-family component. The value of non-residential permits fell 6.3% to $1.8 billion as intentions in the institutional component fell significantly. It was the third consecutive monthly decline in construction intentions in the non-residential sector.
On a cumulative basis, the overall value of permits issued between January and November totalled $55.4 billion. This was a 9.6% gain from the same period in 2004, thanks to tremendous growth in all three non-residential components — industrial, commercial and institutional. Year-to-date gains (in dollars) in permits in Calgary, Edmonton and Vancouver greatly surpassed increases in all other census metropolitan areas. In Calgary and Edmonton, the strength came from huge increases in both housing and non-residential permits. In Vancouver, the non-residential sector largely fuelled the gain. Toronto and Montréal posted the largest declines in total construction intentions. Housing: Multi-family permits fail to hit $1.0-billion mark In the housing sector, the value of construction intentions for multi-family dwellings failed to surpass the $1-billion mark for the first time since March. The value of multi-family permits fell 20.9% to $929 million in November. On the other hand, the value of single-family permits rose 2.9% to $2.2 billion, a fifth consecutive monthly gain. November's level was also the highest since the beginning of the year. Nationally, the number of new single-family units authorized by municipalities was on a declining trend from mid-2004 to mid-2005. Recent demand for new single-family dwellings in Western Canada has helped reverse this trend. Provincially, the largest retreats in the housing component in November occurred in British Columbia and Quebec. In both provinces, an important decline in the multi-family component was behind the drop. Alberta set a new monthly record ($555 million) in terms of the value of residential construction intentions, 5.6% higher than the previous mark set last April. The housing market continued to benefit from a vigorous economy, growth in full-time employment and still advantageous mortgage rates. Tight vacancy rates for apartments in large centres such as Calgary and Vancouver and the high level of immigration also helped stimulate investment. On a cumulative basis, the value of housing permits from January to November totalled $34.9 billion, up 4.1% from the same period in 2004. However, this increase was due to higher prices for new dwellings, since the number of new units approved declined 3.6%. The value of single-family permits totalled $23.0 billion for the 11-month period, up 2.2% from 2004, while the value of construction intentions for multi-family dwellings rose 7.9% to $11.9 billion. The gains came from the higher prices for new dwellings as the number of units approved declined 5.8% for single-family dwellings and 1.1% for multi-family. Among the provinces, the largest gains occurred by far in Alberta (+20.9%) and British Columbia (+14.9%). If these two provinces were excluded, the cumulative value of housing permits would have fallen 1.6% instead of rising 4.1%. Non-residential: Plunge in institutional intentions Builders took out fewer institutional and industrial permits in November, while the value of commercial permits remained stable. Institutional permits fell 19.3% to $440 million following a gain in October. This was largely the result of lower demand for social housing and hospitals buildings. After recording a tremendous increase in October, institutional permits in Alberta plunged 79.3% to $29 million, the largest drop among the provinces. Intentions for industrial construction fell 4.4% to $356 million, with the biggest drop in manufacturing buildings. In Quebec, industrial intentions fell 30.8% to $76 million, the largest decline provincially. Commercial intentions remained virtually unchanged at $975 million. An increase in warehouse and office building offset a drop in permits for recreation buildings and in the hotel and restaurant category. Quebec recorded the strongest gain in this component, a 10.9% rise to $136 million. Among the 28 census metropolitan areas, 14 recorded monthly decreases in the value of non-residential permits. After recording the strongest gain in October, Edmonton had the biggest decline in November, mainly as a result of lower construction intentions in the medical building category. Calgary recorded the strongest increase. All provinces recorded declines, except for Manitoba, Saskatchewan and British Columbia. The largest decrease (in dollars) occurred in Alberta, where the value of non-residential permits fell 12.7% to $382 million, resulting from declines in institutional permits. In October, Alberta had recorded the largest increase. On a year-to-date basis, municipalities issued $20.5 billion in permits in the non-residential sector between January and November. This was up 20.4% from the same period in 2004 and already 9.2% higher than the annual total for 2004. The biggest increase occurred in the commercial sector, where the year-to-date level was up 20.7% to $11.1 billion. Intentions rose 20.9% to $5.6 billion in the institutional sector, and increased 19.0% to $3.7 billion in the industrial sector. Among the provinces, Alberta had the largest year-to-date gain in the wake of strong increases in non-residential permits throughout the province. Quebec recorded the largest decrease due to a strong decline in the institutional component. The nationwide results were in line with recent positive indicators. Retail sales rebounded after two months of sluggish sales, mainly on the strength of the auto sector, while consumer spending at other retailers remained robust. On the manufacturing side, industries edged closer to a record high use of production capacity thanks to a rebound in exports in the third quarter of 2005. In addition, the October 2005 Business Conditions Survey showed that the number of manufacturers planning to increase production in the fourth quarter was slightly higher than those planning cutbacks. Chart 1
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