The Daily. Wednesday, February 7, 2001

Building permits

Municipalities issued $37.7 billion worth of building permits in 2000, the second highest level ever. Both the residential and non-residential sectors recorded their best annual performance since the construction peak of 1989, when the total value of permits reached $40.0 billion.

The 5.4% gain from 1999's total was the fifth straight annual increase in overall construction intentions.

Housing intentions totalled $20.6 billion, up 3.3% from 1999, solely the result of a higher demand for single-family dwellings. The value of non-residential permits was up a substantial 8.1% to $17.1 billion, with increases in all three components - industrial, commercial and institutional.

Among the census metropolitan areas, the most significant gain in cumulative value occurred in the Ottawa region, where the lack of office space and strong demand for new single-family dwellings pushed up intentions. Calgary and Montréal followed, as buoyant activity in the non-residential sector contributed mostly to strong advances in both regions.

Note to readers Unless otherwise stated, this release presents seasonally adjusted data, which ease comparisons by removing the effects of seasonal variations. The monthly Building and Demolitions Permits Survey covers 2,600 municipalities representing 94% of the population. It provides an early indication of building activity. The communities representing the other 6% 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 (such as water works, sewers and culverts) and land.

In December, municipalities issued $3.2 billion in building permits, up 2.3% from November. Growth in non-residential construction intentions more than offset the decline in the residential sector.

Substantial gains for industrial and institutional permits led the non-residential sector to a strong 10.4% increase to $1.5 billion in December. However, the value of housing permits dropped 4.2% to $1.7 billion, with declines in both single- and multi-family dwelling intentions.

Single-family dwellings led the residential sector to strong 2000

Municipalities issued $15.0 billion in permits for single-family dwellings in 2000, up 5.2% compared with 1999. However, multi-family dwelling intentions fell 1.5% to $5.6 billion.

Likely factors behind the strong performance in planned residential projects were high levels of full-time employment, sustained growth in disposable income, low and stable mortgage rates and increased immigration. Provided these conditions persist, the housing market should be positive in 2001, especially since vacancy rates for rental apartments are tightening in several municipalities.

Among the provinces, by far the most significant increase in dollar terms compared with 1999 was in Ontario (+5.4% to $10.4 billion). Ontario accounted for more than four-fifths of the overall increase in the housing sector in 2000. Also showing notable gains were Quebec (+5.1% to $3.3 billion) and Alberta (+ 4.4% to $2.9 billion).

British Columbia posted the biggest decline (-8.2% to $2.4 billion). This was the fourth consecutive annual decline in that province's housing sector.

Non-residential: Highest annual figures in the last 11 years

The 8.1% increase in non-residential permits in 2000 was more than double the 3.7% increase recorded in 1999. All three components - industrial, commercial and institutional - reached their highest level in the last 11 years.

The strong economy and declining vacancy rates for office and commercial buildings in many centres were behind the higher non-residential building intentions. Furthermore, industrial construction intentions were likely spurred by the highest industrial capacity utilization rate in the manufacturing sector in more than 25 years, and by the growing scarcity of industrial space.

Contributing most to the annual growth in the non-residential sector was the commercial component, which rose 8.8% to $9.2 billion, the second highest level ever. The activity came mainly from gains in construction projects for trade and services and for office buildings.

Intentions for industrial construction in 2000 reached $4.0 billion, up 11.3% from 1999. New plants near Highway 407 in the Toronto census metropolitan area were a major factor in the increase.

Institutional building permits increased a modest 3.1% to $3.8 billion in 2000. Notable gains in welfare and governmental administration buildings were behind this advance.

Among the provinces, the most significant growth in 2000 in dollar terms occurred in Ontario (+9.0% to $7.5 billion) and Alberta (+22.3% to $2.5 billion). While the industrial and institutional components played a predominant role in Ontario, the increase in Alberta came mostly from the commercial sector.

Saskatchewan recorded the largest decline (-13.9% to $388 million) as non-residential permits were pulled down mostly by decreases in the institutional and industrial components.

Decline in both single- and multi-family dwellings in December

Builders took out $419 million worth of multi-family dwelling permits in December, down 10.5% from November. Intentions for single-family dwellings followed the same path, declining 1.9% to $1.2 billion.

Among the provinces, a plunge in multi-family building permits led Ontario to the biggest decline in dollar terms in the housing sector (-13.3% to $800 million). Increases in British Columbia (+22.3% to $218 million) and Quebec (+13.1% to $309 million) helped temper the overall decline.

Non-residential sector finished the year on high note

Large gains in industrial and institutional projects led the non-residential sector to a 10.4% increase to $1.5 billion in December, following two consecutive monthly declines.

Strong demand for manufacturing plants was reflected in industrial building permits, which reached $380 million, up 36.2% over November.

Institutional intentions rose 33.4% to $376 million, following two monthly decreases. Gains came mostly from education and welfare home constructions.

Permits in the commercial component declined 6.1% to $779 million in December. After a significant increase in November, the hotel and restaurant category recorded the largest decline.

Among the provinces, the most significant increase in December in dollar terms was in Ontario (+37.0% to $865 million), where the industrial component reached its highest monthly level since December 1989. The largest decrease occurred in Quebec (-30.6% to $231 million), where the industrial and commercial components were the main contributors.

Available on CANSIM: matrices 80 (levels 3-7 and 33-48), 129, 137, 443, 989-992, 994, 995 and 4073.

The December 2000 issue of Building permits (64-001-XIB, $19/$186) will be available soon. See How to order products.

The January 2001 building permit estimate will be released on March 7.

For more information, or to inquire about the concepts, methods or data quality of this release, contact Vere Clarke (613-951-6556; clarver@statcan.gc.ca). For analytical information, contact Étienne Saint-Pierre (613-951-2025; saineti@statcan.gc.ca), Investment and Capital Stock Division.

Value of building permits