Tuesday, November 6, 2007

Building permits

The value of building permits slipped slightly in September—although they were still well above $6 billion—as gains in the residential sector were more than offset by declines in non-residential intentions.

Municipalities issued building permits worth $6.2 billion in September, down 1.7% from $6.3 billion in August. Intentions peaked at $6.9 billion in May and June. This strength during recent months indicates that construction sites should remain busy in the coming months.

Non-residential permits declined 8.6% to $2.2 billion, the lowest level over the last five months. The non-residential level was almost $1.0 billion below its peak in May 2007. The industrial and institutional components experienced double-digit decreases, while the commercial component remained virtually unchanged.

In contrast, intentions in the residential sector climbed 2.6% to $4.0 billion. This ranked as the second highest monthly value since December 2005, thanks to a fourth gain in five months for the single-family component.

The total value of building permits reached $18.7 billion between July and September, down 4.1% from the second quarter of 2007. This was the second highest quarterly level on record for the total value.

The quarterly growth in residential value of 2.1% was not enough to offset a 13.0% loss in non-residential intentions.

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 2,380 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).

Housing sector: Single-family reaches a record high

Strength in employment, growth in disposable income, tight apartment vacancy rates in certain centres, and attractive financing options continued to stimulate the demand for housing.

However, the deterioration of housing affordability due to the rapid growth in prices for new housing—particularly in Western Canada—and the recent increases in mortgage rates could erode demand.

Municipalities approved single-family permits valued at a record high of $2.7 billion, a 9.4% increase over August. The number of single-family units approved rose 4.4% to 10,454, the highest level since January 2006.

The value of multi-family permits fell 9.0% to $1.3 billion. The number of multi-family units authorized declined 12.7% to 9,041.

Provincially, the value of housing permits increased significantly in Ontario (+27.2% to $1.6 billion). This gain originated from both single and multiple residential units, and was sufficient to compensate for the declines in other provinces.

The largest declines (in dollars) occurred in Quebec (-9.6%) and British Columbia (-9.8%), due to drops in multi-family permits. Residential permits incurred double-digit declines in each of the four Atlantic Provinces because of severe drops in multi-family permits.

In the third quarter of 2007, single-family intentions were up 6.3% from the second quarter to $7.5 billion, more than offsetting a 4.6% decline in multi-family intentions to $4.3 billion.

Third-quarter residential permit values rose in seven provinces. Increases in Quebec and Ontario were only partly offset by drops in Alberta and British Columbia, and generated a 2.1% increase at the Canada level.

Non-residential sector: Western Canada pulls down the numbers

Significant declines in the three westernmost provinces were behind the 8.6% drop in non-residential permits in September.

In the commercial component, municipalities issued $1.3 billion worth of permits in September, down a slight 0.4% from August. Commercial intentions peaked in May and June 2007, reaching $2.1 billion and $1.7 billion respectively.

In September, a gain in office buildings permits was largely offset by decreases in projects in the warehouse and retail trade categories.

In the industrial component, the value of permits plunged 22.5% in September to its lowest level since April 2007. Lower construction intentions for manufacturing buildings were behind the retreat. The decline in industrial permits was spread across the country, as Quebec and Manitoba were the only provinces to show a gain.

The value of institutional permits also hit its lowest level in five months, with a 15.9% drop to $517 million. This was fuelled by a lower value of permits for medical buildings. The decline in institutional permits in September came largely from Ontario and British Columbia.

Provincially, the largest decline (in dollars) occurred in British Columbia, where non-residential construction intentions retreated 38.7% to their lowest level since November 2005. All three components experienced reductions in the province.

In Alberta, non-residential permits were at their lowest level in the last five months in the wake of a 10.1% decrease in September. In Saskatchewan, a 48.0% drop in September followed a strong month of August. In both provinces, the overall decline was fuelled by retreats in the industrial and commercial components.

Quebec, New Brunswick and Nova Scotia also reported declines.

In contrast, gains were recorded in Ontario, Manitoba, and Newfoundland and Labrador. In Ontario, intentions for non-residential buildings surpassed the $1.0 billion mark in September for only the third time since 1989, thanks to projects for office buildings.

Despite the September decline, several factors are still having a positive impact on the non-residential sector. Low office vacancy rates, high corporate profits, increasing demand for health and nursing facilities, and the vigorous retail sector are all factors helping to stimulate the demand for non-residential space.

The total value of commercial permits declined 23.8% in the third quarter to $3.9 billion, following a record level in the previous quarter. The value of institutional permits rose 2.5% to their highest value ($1.7 billion) since the third quarter of 2005. Industrial permits increased 11.4%.

Metropolitan areas: Toronto leads the pack

Since the beginning of 2007, 26 out of the 34 census metropolitan areas posted increases in the total value of building permits between January and September compared with the same period in 2006.

The largest gain (in dollars) came from Toronto, with its very high construction intentions for non-residential buildings, and a strong gain in the single-family component. With still a full quarter to be accounted for, the value of non-residential permits was already above the annual totals for 2005 and 2006 in Toronto.

Toronto was followed by Calgary and Vancouver. In Calgary, the strong gain came in large part from the booming commercial sector, especially the office buildings category. In Vancouver, the strong demand in the housing sector was mainly behind the gain.

Available on CANSIM: tables 026-0001 to 026-0008, 026-0010 and 026-0015.

Definitions, data sources and methods: survey number 2802.

The September 2007 issue of Building Permits (64-001-XWE, free) will be available soon.

The October building permit estimate will be released on December 6.

To order data, contact Jasmine Gaudreault (toll-free 1-800-579-8533; 613-951-6321; bdp_information@statcan.ca). For more information, or to enquire about the concepts, methods or data quality of this release, contact Etienne Saint-Pierre (613-951-2025), Investment and Capital Stock Division.

Value of building permits, by census metropolitan area1
	August 2007r	September 2007p	August to September 2007	January to September 2006	January to September 2007	January–September 2006 to January–September 2007
	Seasonally adjusted
	$ millions		% change	$ millions		% change
St. John's	51.7	41.5	-19.8	240.1	280.6	16.9
Halifax	82.6	56.5	-31.6	468.7	491.0	4.8
Moncton	33.2	22.1	-33.3	171.8	205.5	19.6
Saint John	8.5	15.6	83.9	134.5	171.0	27.1
Saguenay	22.3	17.3	-22.1	146.6	158.0	7.8
Québec	171.9	143.5	-16.5	874.4	1,109.9	26.9
Sherbrooke	21.8	18.8	-13.5	257.3	219.7	-14.6
Trois-Rivières	23.7	40.0	68.8	181.5	232.7	28.2
Montréal	556.5	482.7	-13.3	4,377.5	4,860.4	11.0
Ottawa–Gatineau, Ontario/Quebec	231.3	237.3	2.6	1,631.0	1,909.6	17.1
Ottawa–Gatineau (Que. part)	51.6	44.6	-13.7	373.5	473.3	26.7
Ottawa–Gatineau (Ont. part)	179.7	192.8	7.3	1,257.5	1,436.4	14.2
Kingston	25.7	15.5	-39.6	187.7	204.2	8.8
Peterborough	23.5	20.4	-13.2	117.8	118.3	0.4
Oshawa	58.7	52.0	-11.3	673.4	534.0	-20.7
Toronto	1,022.3	1,547.8	51.4	7,932.9	9,803.4	23.6
Hamilton	59.0	63.8	8.1	685.1	800.0	16.8
St. Catharines–Niagara	35.9	29.2	-18.5	413.8	314.5	-24.0
Kitchener	74.5	84.4	13.2	666.5	659.3	-1.1
Brantford	29.5	8.7	-70.5	140.5	145.4	3.5
Guelph	38.6	16.2	-57.9	258.4	230.7	-10.7
London	77.4	78.5	1.4	681.6	695.0	2.0
Windsor	33.3	17.9	-46.2	411.9	241.6	-41.4
Barrie	51.2	32.5	-36.7	401.9	303.0	-24.6
Greater Sudbury	37.3	28.7	-22.9	162.1	295.2	82.1
Thunder Bay	6.6	14.3	115.7	64.7	73.2	13.0
Winnipeg	82.8	90.3	9.0	677.8	702.6	3.7
Regina	27.2	25.7	-5.6	267.2	284.0	6.3
Saskatoon	109.2	49.0	-55.1	333.3	506.2	51.9
Calgary	366.2	501.8	37.0	3,999.1	4,924.7	23.1
Edmonton	420.1	297.6	-29.2	2,499.8	3,043.2	21.7
Kelowna	76.8	84.8	10.4	438.6	632.9	44.3
Abbotsford	17.2	14.6	-14.8	282.7	214.4	-24.1
Vancouver	535.8	368.3	-31.3	4,584.4	5,333.8	16.3
Victoria	60.3	79.9	32.4	567.4	770.8	35.9
r revised p preliminary 1. Go online to view the census subdivisions that comprise the census metropolitan areas. Note: Data may not add up to totals as a result of rounding.

Value of building permits, by province and territory
	August 2007r	September 2007p	August to September 2007	January to September 2006	January to September 2007	January–September 2006 to January–September 2007
	Seasonally adjusted
	$ millions		% change	$ millions		% change
Canada	6,307.9	6,203.3	-1.7	48,060.4	55,371.6	15.2
Residential	3,896.7	3,998.9	2.6	30,160.0	33,580.2	11.3
Non-residential	2,411.2	2,204.4	-8.6	17,900.4	21,791.4	21.7
Newfoundland and Labrador	69.6	60.2	-13.5	359.4	442.5	23.1
Residential	59.5	34.4	-42.2	242.1	301.5	24.5
Non-residential	10.1	25.8	155.2	117.2	141.0	20.3
Prince Edward Island	11.9	10.0	-15.8	155.1	112.2	-27.7
Residential	9.2	7.2	-21.0	92.5	85.3	-7.8
Non-residential	2.7	2.8	1.5	62.6	26.9	-57.1
Nova Scotia	137.9	104.0	-24.6	916.4	960.4	4.8
Residential	100.5	73.6	-26.7	605.0	633.5	4.7
Non-residential	37.5	30.3	-19.1	311.4	326.9	5.0
New Brunswick	95.0	72.1	-24.1	680.0	723.2	6.3
Residential	52.5	44.6	-15.1	371.3	410.6	10.6
Non-residential	42.4	27.5	-35.1	308.7	312.5	1.2
Quebec	1,152.7	1,055.0	-8.5	8,562.6	9,638.0	12.6
Residential	776.8	702.2	-9.6	5,629.9	6,168.5	9.6
Non-residential	375.8	352.8	-6.1	2,932.7	3,469.5	18.3
Ontario	2,210.1	2,581.0	16.8	17,145.0	19,684.8	14.8
Residential	1,239.2	1,576.0	27.2	10,667.5	11,139.1	4.4
Non-residential	970.9	1,005.0	3.5	6,477.5	8,545.7	31.9
Manitoba	119.0	130.1	9.3	1,029.5	1,145.7	11.3
Residential	93.0	83.0	-10.8	610.7	724.1	18.6
Non-residential	26.0	47.1	81.2	418.8	421.7	0.7
Saskatchewan	184.4	133.5	-27.6	865.8	1,163.0	34.3
Residential	75.7	77.0	1.7	335.2	615.5	83.6
Non-residential	108.7	56.5	-48.0	530.5	547.5	3.2
Alberta	1,301.3	1,224.6	-5.9	9,951.3	11,889.3	19.5
Residential	801.6	775.2	-3.3	6,050.6	7,014.3	15.9
Non-residential	499.7	449.4	-10.1	3,900.6	4,875.0	25.0
British Columbia	1,011.7	816.9	-19.2	8,236.4	9,430.8	14.5
Residential	681.5	614.7	-9.8	5,490.8	6,391.4	16.4
Non-residential	330.2	202.3	-38.7	2,745.5	3,039.4	10.7
Yukon	5.9	8.4	42.6	84.7	63.9	-24.6
Residential	3.1	5.0	59.2	30.1	30.2	0.3
Non-residential	2.8	3.4	23.7	54.6	33.7	-38.4
Northwest Territories	4.3	4.7	9.4	32.2	59.1	83.8
Residential	1.2	3.2	157.5	15.0	16.5	10.2
Non-residential	3.0	1.5	-51.4	17.2	42.6	147.9
Nunavut	4.2	2.8	-33.4	42.1	58.6	39.0
Residential	2.9	2.8	-3.3	19.2	49.7	158.9
Non-residential	1.3	0.0	-99.8	23.0	8.9	-61.1
r revised p preliminary Note: Data may not add up to totals as a result of rounding.

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