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April 2008
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Analysis – April 2008
The total value of building permits was up strongly in April as construction intentions rose in all provinces and in both the residential and non-residential sectors.
Contractors took out $6.4 billion worth of permits in April, up 14.5% from March and the highest level since October 2007.
In the residential sector, the value of building permits increased 13.4% to $4.0 billion, the highest value in six months. The increase was generated by a strong gain in the value of multi-family permits.
In the non-residential sector, the value of permits advanced 16.5% to $2.4 billion, due to strong commercial intentions.
Despite the fact that permits increased in April, there has been a downward trend since last summer.
Residential: Multi-family housing boosts intentions
A strong increase in the value of permits for multi-family dwellings boosted intentions in the residential sector in April.
Municipalities issued $1.9 billion worth of permits for multi-family housing, up 39.9% from March and the highest level since December 2005. At the same time, single-family permits fell 2.4%.
Note to readers
Unless otherwise stated, this release presents seasonally adjusted data, which ease comparisons by removing the effects of seasonal variations.
The Building Permits Survey covers 2,400 municipalities representing 95% of the population. It provides an early indication of building activity. The communities representing the other 5% of the population are very small, and their levels of building activity have little impact on the total.
The value of planned construction activities shown in this release excludes engineering projects (e.g., waterworks, sewers or culverts) and land.
For the purpose of the Building Permits release, the census metropolitan area of Ottawa–Gatineau is divided into two areas: Ottawa–Gatineau (Quebec part) and Ottawa–Gatineau (Ontario part).
The number of multi-family units approved increased 19.1%, while the number of single-family units declined 0.6%.
This was consistent with a general tendency observed over the last five years, whereby demand has shifted from the more expensive single-family dwellings toward more affordable multi-family units.
Non-residential: Strong gains in the commercial component
Intentions increased in all three components in the non-residential sector in April, especially in commercial.
The value of commercial permits rose 20.2% to $1.5 billion. Again, this was the highest value since October 2007. The gain was due largely to higher construction intentions for hotels and retail outlets.
The value of industrial permits rose 6.7% to $335 million following a 22.9% drop in March. This result was fuelled by increases in permits for manufacturing and primary industries buildings, mainly in Alberta.
In the institutional component, builders took out $524 million in permits, a 13.0% increase, which followed two consecutive monthly drops. The gain was attributable to an increase in projects for medical buildings.
The non-residential sector continued to be positively affected by low office vacancy rates and a vigorous retail sector, despite a drop in corporate profits.
Permits up in all provinces
The value of building permits increased in all provinces in April, especially in Ontario, British Columbia, Alberta and Quebec, which all posted double-digit gains.
The most significant increase (in dollars) occurred in Ontario (+12.5% to $2.4 billion) in the wake of a 50.3% advance in the value of construction intentions for multi-family dwellings. These intentions reached their second highest level on record.
Also posting sizeable gains were Alberta (+11.7%) and Quebec (+11.0%). In both provinces, the rise came from both residential and non-residential components. The increase in Alberta followed a low level of construction intentions in March.
Intentions rose 13.5% in British Columbia, thanks to the commercial component.
The value of permits in Saskatchewan hit a record high of $229 million in April, fuelled by strong results in both components. This was 6.4% above the previous all-time high in December 2007.
A record high was also set in the value of residential permits in Prince Edward Island.
Strong demand for multiple dwellings in Toronto
Of the 34 census metropolitan areas, 24 recorded gains in the value of building permits in April.
The largest increase (in dollars) was recorded in Toronto, where an increase in permits for multi-family dwellings more than offset a decline in intentions for single-family dwellings. Municipalities approved 3,716 units in Toronto in April, the highest number in four months. Just over three-quarters of these were multi-family dwellings and their value was the second highest since December 2005.
In contrast, the total value of permits in Hamilton declined in April, due to large drops in the residential sector following a record monthly high in March.
