Highlights

Annual 2003 (preliminary) and December 2003

Canada went on a building boom in 2003, as municipalities smashed records for both residential and non-residential intentions and the value of building permits soared past the $50-billion mark for the first time.

In total, municipalities issued $50.8 billion in building permits, up 7.5% from the previous record of $47.3 billion set in 2002. It was the eighth consecutive year in which the value of permits increased, and it was the torrid demand for new housing that drove construction intentions to their new peak.

Permits in the housing sector hit a record of more than $32.0 billion, up 8.3% from the previous high of $29.6 billion, also set in 2002. Municipalities authorized 223,106 new dwellings in 2003, the highest since 1988 when 234,132 units were authorized.

In the non-residential sector, construction intentions hit a peak of $18.8 billion, up 6.3% from 2002. Record institutional intentions were reinforced with near record commercial permit issues and supported by a rebound in the industrial sector.

Records for overall construction intentions were smashed in every province except Prince Edward Island and Alberta last year. The most important rise (in dollars) from 2002 occurred in Quebec.

The largest annual growths (in dollars) among the 28 metropolitan areas occurred in Toronto and Montreal. While in Toronto, projects for industrial and commercial buildings were behind the gain, in Montreal the increase came from the very strong demand for new dwellings. The metropolitan areas of Oshawa, Winnipeg and Quebec also posted sizeable gains.

On a monthly basis, the year ended on a strong note in December as builders took out $4.6 billion worth of building permits, up 12.8% from November and the highest figure over the last 5 months.

Home builders will be busy at the beginning of 2004, as the value of residential permits reached a new monthly peak of $2.95 billion, up 6.6% from November. It surpassed the old record of $2.91 billion set in September. The value of non-residential permits rebounded after two weak months to $1.6 billion, a 26.2% increase from November.

Residential: Boom in multi-family dwellings

Contractors took out $22.1 billion in single-family permits, up 4.8% from 2002. Construction intentions for multi-family jumped 16.8% in 2003 to $9.9 billion. The value of permits for apartments alone went up 19.9%.

Municipalities authorized 100,102 new multi-family dwellings units, an increase of 12,122. On the other hand, the number of authorized single-family units fell by 4,362 to 123,004. The increase in the value of permits for singles was the result of a 7.9% jump in the average worth of each permit.

The rapid increase in the cost of single-family dwellings was a factor inducing a shift in the demand of new dwellings. While between 1996 and 2001 the proportion of new multi-family dwellings authorized accounted for 38% to 41% of all dwellings, this proportion jumped to 45% in 2003.

The housing sector was boosted last year by the positive impact of low mortgage rates on affordability, and by the high level of employment and strong consumer confidence. The scarcity of existing dwellings available in certain areas of the country also pushed up the demand for new dwellings.

Tight resale and rental markets led Quebec to the strongest gain among the provinces in 2003. British Columbia came second. Regionally, 21 out of the 28 metropolitan areas showed growth in the value of residential permits in 2003. The largest annual growth in terms of dollars occurred in Montreal and Vancouver.

On a monthly basis, the value of single-family dwellings totalled $2.2 billion in December, up 13.8% from November. It was the first time that single-family permits had exceeded the $2 billion mark. The value of multi-family permits retreated 9.0% to $800 million, the third consecutive monthly decline.

In December, the most marked gains occurred in British Columbia and Alberta. Quebec also ended the year on a strong note.

Non-residential: Strength in all components

All three components contributed to the record year for non-residential intentions. However, the institutional component posted its third consecutive annual record.

Institutional construction intentions rose 1.5% to $5.8 billion for the year. It was the smallest annual gain among the three components, but the seventh consecutive year of growth. The main factor was the construction projects for medical facilities and government administrative buildings.

Commercial intentions rose 7.8% to $9.3 billion, their highest level since 1989. Record demand for trade and service building permits and warehouses, which hit a three year high, more than offset a slide in permits for office buildings. The Monthly Retail Trade survey has noted that retail sales have generally been increasing since the fall of 2001. Meanwhile office vacancy rates in many centers have remained elevated.

The industrial component rose 10.7% to $3.6 billion, marginally ahead of the annual average for the past decade. Demand for factory permits regained some of their steam from last year, though permits were still less than the average for the preceding five-year period.

Fourteen of 28 census metropolitan areas posted gains in the value of their non-residential permit issues from 2002. Those with the greatest growth in dollar value were headed by Toronto, where permits hit $4.2 billion and where all three components exhibited gains. Non-residential permits in Calgary also increased significantly to $1.0 billion.

Leading the provinces in growth was Ontario where non-residential permits reached $9.0 billion as the value of manufacturing buildings and trade and services permits jumped.

On a monthly basis, the non-residential sector shrugged off two consecutive months of declines, leaping 26.2% to just over $1.6 billion.

Permits in the commercial sector rose 25.6% in December to $885 million. Ontario underwrote growth in this sector with demand increasing particularly for laboratory, office and warehouse permits.

The industrial sector halted four straight months of declines with a 40.4% boost to $325 million. Factory projects approved by municipalities in Ontario were a primary contributing factor.

Institutional construction intensions grew 18.3% to $426 million. Ontario again provided the impetus behind the gains as medical projects there jumped.

Provincially, six provinces exhibited gains over November levels. Ontario was the bastion of strength as non-residential permits soared to $906 million, the highest value since February.