Canadian building permits issued in July rose 20.7 per cent from June, hitting nearly $8 billion, a record for the month.
This is mainly due to a rise in construction plans for commercial buildings, but residential dwellings also saw a modest rise according to Statistics Canada.
The sharp gain was unexpected, as 10 forecasts in a Bloomberg survey predicted a median rise of only 3.5 per cent in July. While building permit figures have been fluctuating since 2011 — increasing by 29 per cent and then declining by 23 per cent — economists are still hopeful.
“This volatile series still seems to have an upward trend heading into [the third quarter], suggesting that construction will still be a growth contributor in the near term,” Avery Shenfeld, the chief economist at CIBC World Markets, told The Wall Street Journal.
Here’s a breakdown of Statistics Canada’s recent findings on residential building permits:
Construction plans for single-family dwellings rose 4.1 per cent in July, totalling $2.2 billion.
Construction plans for multi-family residences increased by 4.2 per cent to $1.89 billion.
Canadian municipalities authorized the construction of 17,504 new residences, a 0.7 per cent decrease from June. The decrease was due to multi-family homes, which fell three per cent to 11,193 units in July. Single-family dwellings increased 3.7 per cent to 6,311 units.
Non-residential building permits experienced the highest increase by 45.5 per cent to a record $3.86 billion. Commercial buildings were at the helm of it, with a growth of 89.2 per cent.
More specifically, permit value rose in six provinces. Ontario experienced the biggest increase, followed by Quebec and Alberta. Total permit numbers dipped in British Columbia due to a decline in multi-family residences and commercial building plans.
Honing in on cities, the largest permit gains occurred in Toronto, Calgary and Montreal. The increase for all three was mainly due to higher construction intentions for commercial buildings. In contrast, building permits in Vancouver decreased as a result of less commercial construction.
Last week, The Bank of Canada announced the housing market is stronger than expected, but it’s still slow-moving thanks to higher mortgage rates and slower household credit growth.
Photo: Kiril Strax/Flickr